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live Voluntary participation of private creditors in the Greek PSI has reached 85.8

09 March 2012 / 10:03:44  GRReporter
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85.8 is the voluntary participation of private creditors in the Greek PSI, according to the initial data of the Ministry of Finance. This figure means that holders of bonds worth 29 billion euro have refused to remit the Greek debt.

Greece is ready to trigger the collective action clauses, and thus the percentage of voluntary participation of private creditors will reach 95.7 percent. The decision to trigger the CAC clauses will be taken at a special video conference of the finance ministers from the eurozone, which is scheduled for this afternoon.

Bonds worth 177 billion euro have been issued under Greek law. From those, bonds worth 152 billion euro will participate in the procedure for the exchange of Greek securities. The rest of the Greek debt is in bonds issued under foreign law, and in bonds issued by the Greek state enterprises. For them, the government has launched another procedure, the deadline for which is 23rd March.
    After the enactment of the collective action clauses individuals who have purchased Greek bonds will participate in the debt remission. Finance Minister Evangelos Venizelos promised that those individuals will receive immediate compensation, but first they have to voluntarily participate in the exchange. This is a legal issue for which a solution is sought so as not to jeopardize the whole PSI procedure. We are talking about citizens who have purchased bonds worth up to 100 thousand euro. They are in total 9500. 1500 other investors hold bonds of greater value and they will be treated equally with institutional lenders.

At 3 o’clock the International Association of swap and derivatives will also meet, which will decide whether Greek PSI is a credit event and whether they will have to pay insurance against the bankruptcy of Greece. The Institution already ruled once that the exchange of bonds is not a credit event. Today, however the situation is different as the enactment of the collective action clauses has become inevitable.

The exchange itself of the old bonds with new ones with lower face value, lower interest rates and longer maturity period will be made on Monday, 12th March.
     Markets however reacted negatively to the great success of the Greek PSI. The price of the euro dropped against the greenback and it is currently traded for 1.3215 dollars. The Athens Stock Exchange registered a decline of 0.75 percent, while its index stopped at 763.10 basic points. The only good news came from the European Central Bank, which announced that starting from today it will begin to accept Greek government bonds again as guarantees for granting loans.

 

Tags: Greek debt private creditors debt remission procedure economic crisis PSI
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