carib
rerum cognoscere causas
UPDATE 2-Greece extends foreign law bond swap to April 4
Fri Mar 23, 2012 12:52pm EDT
(Adds further background, details)
By Alex Chambers
LONDON, March 23 (IFR) - Greece has extended the deadline for foreign law bondholders to swap notes for a second time, giving investors until April 4 to sign up to PSI, a source said.
On March 9, Greece said that 69% of these bondholders had agreed to participate and extended the deadline until this evening at 2100 CET. Therefore, only EUR9bn nominal of Greek bonds are not participating in the PSI but the sovereign has taken a hard line against these without explicitly stating that it will default.
The PSI would see investors swap their paper for a range of instruments worth nominally 53.5%.
Greece could continue to extend the deadline with the real day of reckoning not until May 15.
"The real deadline is May 15 - that's judgement day as it's the maturity of the holdouts' bond of choice," said the source.
On May 15 Greece has a EUR450m floating rate note that matures. Its price has consistently held up above 80% of par, more than double most old Greek bond prices.
However, under the terms of the original offer a series of meetings to approve the amendments of all 35 foreign law bond issues were scheduled for next week at the London offices of Cleary Gottlieb, the law firm advising Greece. A final settlement date of April 11 had been set as well.
Holdouts from the PSI are targeting several lines of bonds, including small issues by state-owned Hellenic Railways maturing this year.
Any non-payment of the foreign law bonds would then spark a cross-default and provoke further actions by holders of larger issues, such as the EUR5.6bn 2016s. The latter have doubled in price since the first deadline on March 8, to 58 cents in the euro. (Additional reporting by Christopher Spink; editing by)
utile nuova.
