Pacific Investment Management Co.’s Bill Gross said the U.S. will avoid a “catastrophic” default on Treasury securities if lawmakers fail to extend the debt limit on the nation’s debt.

“The U.S. Treasury is the center of the global financial complex,” Gross, manager of the world’s biggest bond fund, said during a Bloomberg Television interview with Trish Regan and Adam Johnson.

A default would be “unimaginable,” as it would have “catastrophic” consequences on U.S. borrowing costs, and would trigger a “complex series of events worldwide” that would ripple through global financial markets.

The U.S. government Tuesday began its first partial shutdown in 17 years after Congress failed to break a partisan deadlock by a midnight Monday deadline. Congressional leaders have scheduled no further negotiations on spending legislation, raising concern among some lawmakers that the shutdown may have an impact on the more consequential fight over how to raise the U.S. debt limit to avoid a first-ever default after Oct. 17.

The odds of a default are “a million to one,” as the Treasury Department will be able to take other measures to ensure it is servicing the country’s debt, Gross said.

“The Treasury is not going to default on their debt simply because the debt ceiling isn’t going to be raised,” Gross said. “There will be other repercussions like slower economic growth. But the Treasury is not going to default.”

Economic Slowdown

There will be a slowdown of economic growth of about 0.1 percent each week the shutdown continues, Gross said.

Treasury Secretary Jacob J. Lew told Congress on Sept. 25 that the extraordinary measures being used to avoid breaching the debt ceiling “will be exhausted no later than Oct. 17” and that the department will have about $30 billion to pay obligations.

Fitch Ratings, which has a negative outlook on its AAA grade, reiterated in a statement today that its assessment of the country’s credit grade is taking into account the political debate over raising the debt ceiling.

Moody’s Investors Service assigns the U.S. a stable Aaa ranking and said last month that it expects the debt ceiling to be raised, averting a default, and for the government to avoid a shutdown.

S&P Downgrade

Standard & Poor’s cut the U.S. rating to AA+ from AAA in August 2011, a move that reflected the impasse over raising the debt limit as well as the government’s lack of a plan to rein in its debt load.

Faith in the U.S.’s credit is “a key underpinning of the U.S. dollar’s global reserve currency status and reason why the U.S. ’AAA’ rating can tolerate a substantially higher level of public debt than other ’AAA’ sovereigns,” Fitch said.

While the S&P downgrade didn’t result in investors charging the U.S. more to borrow, as 10-year yields slipped to a record 1.38 percent in July 2012, the move contributed to a global stock-market rout that erased about $6 trillion in value from July 26 to Aug. 12, 2011. Yields on Treasurys due in 10 years have risen to 2.64 percent.

The $251 billion Total Return Fund managed by Gross has lost 1.89 percent this year, beating 47 percent of its peers, according to data compiled by Bloomberg. The fund gained 1.77 percent in the past month, beating 99 percent of its peers.