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 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.