discipline
Forumer storico
Greek public debt structure (euros)
EU-IMF loans 73bn
Other debt 37bn
ECB bond purchases 60bn
Private sector bonds 205bn
Total debt (Dec 2011) 375bn
Private sector holdings (euros)
Foreign banks/funds 40bn
Greek banks/funds 75bn
Hedge funds/persons 80bn
Sovereign funds (China) 10bn
Potential PSI bonds total 205bn
- Under Greek jurisdiction 190bn
PSI/bailout funds (euros)
Private sector writeoff 100bn
EU-IMF contribution 70bn
Total EU-IMF bailout loan: 130bn
- Cash to PSI participants 30bn
- Greek bank recapitalisation 40bn
- Net Greek deficit financing 60bn
PSI bond swap proposal (Jan 19)
- 35 euros in new bonds
Net present value loss 68%
Average annual coupon 4%
Discount rate 9%
Mostruoso il dato di 80B tra HF e privati.
Dati da questo articolo:
PSI talks near final deal
THE GOVERNMENT resumed its talks with representatives of private bondholders on January 18 in a race against time to clinch a deal for the writedown of the country’s debt by 100bn euros before the next EU summit at the end of the month.
Prime Minister Lucas Papademos and Finance Minister Evangelos Venizelos met with Charles Dallara, the head of the Washington-based bankers’ lobby, for a new round of negotiations on private sector involvement (PSI), which had broken down on January 13.
The International Institute of Finance (IIF) chief walked out of the talks last week in disagreement over the future interest rate on the new bonds which bondholders would receive after writing 50 percent off the face value of their old ones.
The difference over the new bonds’ coupon rate may not have been overcome yet, but Dallara’s return to Athens indicates that the EU and the IMF have given way to IIF pressure for higher coupon rates than the ones which led to the breakdown of the talks on January 13.
The 2.5-3.0 percent rates which the International Monetary Fund (IMF) had deemed appropriate for the sustainability of Greek debt in early January have now been abandoned in favour of a compromise offer of “at least 4 percent” which the IIF equates to a haircut of 65-68 percent on the net present value of the old bonds.
Fine print
The Financial Times reported that the interest rate on the new bonds was proposed to start at 3 percent for the first five years and increase to around 4 percent as the bonds near maturity in their 20- to 30-year lifespan, allowing for an average rate closer to the demands of the private bondholders.
“They [Dallara] went to Athens and didn’t pick up where they left last Friday. They’re proposing new things ... a yield well below 4 percent that will increase biannually,” an EU official told Dow Jones Newswires on January 19.
This was later confirmed by a Greek government official. “We are discussing a proposal for a coupon starting at around 3.6-3.7 percent, which will progressively increase over time. Dallara will put this proposal to the banks and will come back with their responses tonight,” the official said.
Dallara has reportedly shrugged off a Greek offer of coupons “marginally above 3.5 percent” at his earlier meeting with Papademos and Venizelos after the IIF chief returned to Athens on January 18.
The partial debt writedown is an essential component of a second, 130bn euro EU-IMF bailout package agreed at the EU summit on October 27 to cover the country’s financing needs through 2015.
But some 70bn euros of this new loan pact is earmarked to sweeten the PSI pill for the Greek and foreign banks who will volunteer for the haircut, while another 15bn euros will go towards the redemption of the bond issue that matures on March 20.
PSI talks near final deal | Athens News
EU-IMF loans 73bn
Other debt 37bn
ECB bond purchases 60bn
Private sector bonds 205bn
Total debt (Dec 2011) 375bn
Private sector holdings (euros)
Foreign banks/funds 40bn
Greek banks/funds 75bn
Hedge funds/persons 80bn
Sovereign funds (China) 10bn
Potential PSI bonds total 205bn
- Under Greek jurisdiction 190bn
PSI/bailout funds (euros)
Private sector writeoff 100bn
EU-IMF contribution 70bn
Total EU-IMF bailout loan: 130bn
- Cash to PSI participants 30bn
- Greek bank recapitalisation 40bn
- Net Greek deficit financing 60bn
PSI bond swap proposal (Jan 19)
- For each 100 euros of old bonds, investors will receive:
- 35 euros in new bonds
- New coupon rate: 3.5-4.5%
- Maturity: 30 years
- GDP bonus: 10 basis points per 1% of Greek growth
Net present value loss 68%
Average annual coupon 4%
Discount rate 9%
Mostruoso il dato di 80B tra HF e privati.
Dati da questo articolo:
PSI talks near final deal
THE GOVERNMENT resumed its talks with representatives of private bondholders on January 18 in a race against time to clinch a deal for the writedown of the country’s debt by 100bn euros before the next EU summit at the end of the month.
Prime Minister Lucas Papademos and Finance Minister Evangelos Venizelos met with Charles Dallara, the head of the Washington-based bankers’ lobby, for a new round of negotiations on private sector involvement (PSI), which had broken down on January 13.
The International Institute of Finance (IIF) chief walked out of the talks last week in disagreement over the future interest rate on the new bonds which bondholders would receive after writing 50 percent off the face value of their old ones.
The difference over the new bonds’ coupon rate may not have been overcome yet, but Dallara’s return to Athens indicates that the EU and the IMF have given way to IIF pressure for higher coupon rates than the ones which led to the breakdown of the talks on January 13.
The 2.5-3.0 percent rates which the International Monetary Fund (IMF) had deemed appropriate for the sustainability of Greek debt in early January have now been abandoned in favour of a compromise offer of “at least 4 percent” which the IIF equates to a haircut of 65-68 percent on the net present value of the old bonds.
Fine print
The Financial Times reported that the interest rate on the new bonds was proposed to start at 3 percent for the first five years and increase to around 4 percent as the bonds near maturity in their 20- to 30-year lifespan, allowing for an average rate closer to the demands of the private bondholders.
“They [Dallara] went to Athens and didn’t pick up where they left last Friday. They’re proposing new things ... a yield well below 4 percent that will increase biannually,” an EU official told Dow Jones Newswires on January 19.
This was later confirmed by a Greek government official. “We are discussing a proposal for a coupon starting at around 3.6-3.7 percent, which will progressively increase over time. Dallara will put this proposal to the banks and will come back with their responses tonight,” the official said.
Dallara has reportedly shrugged off a Greek offer of coupons “marginally above 3.5 percent” at his earlier meeting with Papademos and Venizelos after the IIF chief returned to Athens on January 18.
The partial debt writedown is an essential component of a second, 130bn euro EU-IMF bailout package agreed at the EU summit on October 27 to cover the country’s financing needs through 2015.
But some 70bn euros of this new loan pact is earmarked to sweeten the PSI pill for the Greek and foreign banks who will volunteer for the haircut, while another 15bn euros will go towards the redemption of the bond issue that matures on March 20.
PSI talks near final deal | Athens News
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