Greece Debt Swap Deadline Nears

Greece is waiting for the final decision from the rest of the investors holding the Greek government bonds eligible for the nation’s debt swap.

So far, about 60 percent of investors indicated they will participate in the debt swap. Greece needs at least 75 percent of its bondholders to agree to take a cut in the value of their holdings by 20:00 GMT today. The goal of the exchange is to reduce the 206 billion euros of privately held Greek debt by 53.5 percent.

Greece’s largest banks, most of the country’s pension funds, and more than 30 European banks and insurers including BNP Paribas (BNP) SA, Commerzbank AG (CBK) and Assicurazioni Generali SpA (G) have agreed to the offer. But some small pension funds have said they will not – and others are waiting to see what hedge funds will do.

According to a Greek government official, “the pace of responses to the bond offer is good, the percentage of bondholders tendering voluntarily is very high”.

While Greece would prefer a voluntary deal, the government has said it will use collective action clauses (CAC) to force holders of Greek-law bonds into the swap in the event if it doesn’t get a sufficient number of investors agreeing to the debt swap.

The European Union and International Monetary Fund have said, if the debt swap does not go through, Greece will not get its latest bailout of 130 billion euros. Athens was first bailed out in 2010 with 109 billion euros from the EU and IMF.

The government said that an official announcement on the private investors’ agreement on the debt swap will appear on its Greek bonds website at 06:00 GMT on Friday.

Source: BBC

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Kenny Fisher

Kenny Fisher

Market Analyst at OANDA
A highly experienced financial market analyst with a focus on fundamental analysis, Kenneth Fisher’s daily commentary covers a broad range of markets including forex, equities and commodities. His work has been published in several major online financial publications including, Seeking Alpha and FXStreet. Based in Israel, Kenny has been a MarketPulse contributor since 2012.
Kenny Fisher

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