Greek Banks Seen Taking EUR5 Bln Hit From Swap Deal
By Costas Paris and Alkman Granitsas
Of DOW JONES NEWSWIRES
LONDON (Dow Jones)--Greek banks are expected to face combined losses totalling about EUR5 billion under a proposed bond swap program, a Greek government official said Wednesday, adding that the program is now slated to conclude in October.
Speaking to Dow Jones Newswires, the official added that the banks are expected to reflect the impact of those losses when they announce their quarterly earnings next week.
"The amount of the losses is yet to be determined, but estimates are for roughly EUR5 billion. They may be reflected in the banks' second quarter results due by August 31," the official said.
"The banks will have to state whether they will participate, and also their preferred instrument of participation, by early September, while the process is expected to be completed in October," the official added.
In July, European Union leaders agreed to a new EUR109 billion aid program for Greece to cover its financing needs for the next several years. Central to the Greek plan is a distressed-debt exchange whereby the country's private-sector creditors agree to accept new bonds worth less than their original holdings.
The exchange would offer creditors four choices to swap or roll over their existing Greek government bonds maturing in the next nine years, with new 15- and 30-year debt that would pay 21% less than their original holdings.
The Institute for International Finance, a trade body of the world's leading banks and author of the plan, has said the exchange would slice EUR13.5 billion off Greece's total stock of EUR350 billion in public debt, while also lengthening the maturity profile of Greece's debt.
According to the official, Greek banks will most likely choose the option that involves rolling over existing bonds maturing between now and 2020--or possibly by 2024--with new 30-year ones at par value with a weighted average coupon of 4.75%.
"Greek banks may mostly opt for the rollover option because it suits them better," the official said without elaborating. According to analysts, the rollover option may have the smallest impact on the banks' capital position and any losses could therefore be absorbed more easily.
Greek banks hold a combined portfolio of around EUR40 billion worth of Greek government bonds and, relative to other European banks, will feel the biggest impact from the exchange program.
For that reason, talks between the Greek government, bankers and international auditors over the bond swap program--which began late last month in Athens--have been heavily focussed on technical and accounting details.
Earlier this week, Greece's government sent a letter to Greek banks setting a Sept. 9 deadline for them to detail their participation in the bond swap program, according to Greek banking sources. Later this week, the banks will receive a more detailed memorandum outlining the broad terms of the deal, the official added.
But the talks have dragged on longer than expected with the government originally hoping to wrap up a final deal ahead of the banks' earnings announcements.
Next Monday and Tuesday, Greece's four major lenders--the National Bank of Greece SA (NBG), Alpha Bank SA (ALPHA.AT), EFG Eurobank Ergasias SA (EUROB.AT) and Piraeus Bank SA (TPEIR.AT)--are due to announce second quarter results.
postato da tommy.
per me quest'anno le banche greche lo chiudono in perdita. do una possibilitá a Nbog, se fará delle operazioni straordinarie di vendita controllata turca.
penso che la possibilitá che il prossimo anno paghino cedole sia molto molto difficile.
