Jumat, 23 Maret 2012

greece bond sinking , rumor of an extension on today's deadline on dealing with Greece foreign law bonds and items of interest ahead of net Friday Econfin meeting....


Eurosis Is Back As "New" Greek Bonds Break 20%, Slide 14% In 2 Days

Tyler Durden's picture

Well that didn't take long. New Greek bonds (GGB2) have dropped dramatically in the last 2 days. The 2023 bond has fallen from over EUR29.5 on Wednesday to under EUR25.5 this morning, prices have dropped an incredible 14% and down a painful 17.5% from its opening break highs of just 2 weeks ago. Yields have broken back above 20% for the first time for this new 10Y as it appears reality is sinking in that Greek Bailout III will come sooner rather than later. Eurosis is back.
Price has tumbled significantly...
and implicitly yield has exploded - now over 20%...



12.24pm: The focus the eurozone story is increasingly going to zoom in on next Friday's Ecofin meeting in Denmark. As we said earlier (and I'm indebted to our Europe editor Ian Traynor for that entry), the question of how big the euro rescue fund should be will dominate the meeting but there will probably be a compromise to take the fund a bit higher than the €500bn limit the Germans would like and the near-€1 trillion bazooka everyone else wants.
Reuters reports that it has seen a document in Brussels which sets out the options. These are exactly along the lines that we reported earlier but worth reiterating:
Option 1: The EFSF and ESM are combined to create a €940bn fund, minus the money already dished out to Greece, Portugal and Ireland and leaving a fund of €740bn. The Commission hopes such a show of strength would then encourage the US and CHina to stump up more money to the IMF to bolster the rescue effort.
Option 2: Allow the EFSF and ESM to operate independently of one another until the EFSF is wound down next year. That would also equate to a joint-lending capacity of 740 billion euros but only until the EFSF is closed.
Option 3: Disband the EFSF ahead of 2013, making the ESM responsible for all lending, leaving a total lending capacity of €500bn.
An EU diplomat told Reuters: "The question is what Germany might want in return to agreeing to a bigger firewall, be it more austerity from member states, or a German in one of the top posts soon to be vacant in the EU."
11.18am: Back to ground zero, aka Athens, where our correspondentHelena Smith says senior government sources are denying that there could be an extension in the deadline for participation in the exchange of bonds regulated by foreign law. Helena writes:
As was the case for the swap for bonds governed by Greek law earlier this month the deadline will officially end at 8PM GMT.
"This is the first I've heard of it [an extension]. I don't think that is going to be the case," said a well-briefed government source.
But the merry go round that is the great Athenian rumour mill is nonetheless swirling with talk that the deadline will be extended – if only because there are more than ten Greek bonds governed by foreign law and in each case holders will require a different quorum to decide whether to take up the offer, or not.
"There is a lot of speculation this morning that it will de prolonged if only for that reason," said another well-placed insider. The public offering was meant to gets off the ground Monday.
Private sector participation in the first round of the debt restructuring hit 85.8 % - a take-up rate that rose to above 97 % when the Greek government activated collective action clauses, or CACS, to force recalcitrant bond holders to participate in the bond exchange.

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