Sabtu, 24 Maret 2012

As expected a second deadline for the foreign law bonds has come and gone. While the real deadline might not be April 4th , but rather as far out as May 15th , that leaves the question of whether the Greek elections go forward on either April 29th or May 6th with the foreign law bonds unresolved ?

Greece extends deadline for foreign bond swap

Greece on Friday said it had extended to April 4 a deadline for private creditors to swap foreign-law Greek government bonds they hold for new securities as part of a debt restructuring, confirming an earlier IFR-Reuters report.
"The Hellenic Republic decided to extend until 9.00 p.m. (CET) April 4 the expiration deadline for holders of each series of its bonds issued under laws other than Greek law and of bonds issued by state enterprises and guaranteed by the Republic,» the finance ministry said.
Holders of about 20 billion euros in foreign-law and state enterprise bonds, or 69 percent of a total face value of 28.3 billion euros, had already accepted Greece's offer on March 9 and holdouts had been given until March 23 to decide.
Greece's bond swap known as private sector involvement (PSI) is meant to reduce its debt mountain.
On March 12 Athens swapped a nominal amount of 177 billion euros of government paper issued under domestic law for new securities, inflicting real losses of about 74 percent on private sector bondholders.
The exchange of foreign law bonds with new securities is set to be settled on April 11. [Reuters]


Greece extended the deadline for holders of foreign-law bonds to participate in a 206 billion- euro ($273 billion) debt swap.
The deadline for investors holding about 9 billion euros of untendered bonds governed by laws other than Greek was extended to April 4, according to a statement on the Greek Finance Ministry website
The government on March 9 used collective-action clauses on Greek-law bonds to bring the participation to 95.7 percent of all eligible securities. Investors holding the remaining bonds were given until 10 p.m. Athens time today to decide whether to participate.
Prime Minister Lucas Papademos won parliamentary approval this week for a new 130 billion-euro bailout from the European Union and International Monetary Fund that will keep the country’s possible financial collapse at bay. The second financing package and debt swap were key elements in European leaders’ efforts to turn the tide against the crisis that emerged in Greece in late 2009, and then forced Ireland and Portugal to follow in requiring bailouts.

Spending Cuts

Papademos had to agree to deeper spending reductions to obtain the new funds, including cuts to pensions and wages that prompted riots in Athens when the measures were brought to parliament on Feb. 12. Papademos was appointed in November to shepherd the measures through parliament and secure the loan accord before standing aside for general elections.
Investors participating in the exchange will take a 53.5 percent reduction in the face value of their Greek debt securities. Evangelos Venizelos, who resigned as finance minister this week to lead the Pasok party in elections that may be held as soon as next month, said March 9 that after today’s deadline, sweeteners used to make the offer more attractive to investors will no longer be available. These include notes issued by the European Financial Stability Facility and securities linked to growth in the country’s gross domestic product.


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 €9bn 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 due until May 15.
“The real deadline is May 15 - that’s judgement day as its the maturity of the holdouts’ bond of choice,” said the source.
On May 15 Greece has a €450m floating rate note that matures. Its price has consistently held up above 80% of par, more than double most old Greek bond prices.
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 €5.6bn 2016s. The latter have doubled in price since the first deadline on March 8, to 58 cents in the euro.

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