There are several different degrees of default, and ratings agencies take into account the severity of possible or past defaults in assigning credit ratings. F

There are several different degrees of default, and ratings agencies take into account the severity of possible or past defaults in assigning credit ratings. For instance, Standard & Poor's has the following distinction [1]: > An obligor rated 'SD' (selective default) or 'D' has failed to pay one or more of its financial obligations (rated or unrated) when it came due. A 'D' rating is assigned when Standard & Poor's believes that the default will be a general default and that the obligor will fail to pay all or substantially all of its obligations as they come due. An 'SD' rating is assigned when Standard & Poor's believes that the obligor has selectively defaulted on a specific issue or class of obligations, excluding those that qualify as regulatory capital, but it will continue to meet its payment obligations on other issues or classes of obligations in a timely manner. A selective default includes the completion of a distressed exchange offer, whereby one or more financial obligation is either repurchased for an amount of cash or replaced by other instruments having a total value that is less than par. According to this definition, Greece is SD, and S&P has rated this credit event so. Felix Salmon is very much a "default is default, even if it means making a coupon payment one day late" kind of person: he is not using weasel words here. [1]: http://www.standardandpoors.com/ratings/articles/en/us/?assetID=1245303711350 http://www.standardandpoors.com/ratings/articles/en/us/?asse...