Very simple reason: international officials do not consider the plan likely to trigger claims on default insurance (which would drag a number of ‘indirectly exposed’ financials into the murk). International Swaps and Derivatives Association’s David Geen comments, “As I understand it the French plan is effectively a voluntary rollover. and generally speaking a voluntary rollover wouldn’t trigger CDS.”
The ‘French Plan‘ to handle loans from the second bailout package is designed to help Greeks stave off an all-out default by asking bondholders to voluntarily reinvest their maturing securities back into Greek 30-yr bonds. According to a statement from Standard and Poor’s (NYSE:MCO) yesterday, even the French Plan could result in Greek debt ratings being lowered to ‘default levels.’ The plan remains the most popular international solution on the table.