ZeroHedge had a Goldman Sachs report that shows the bonds paying 5% in principal each year starting in 2023. Using flat yield curves for now, that would add about 4-6 points of value on the long bonds, or about 1 – 1.5 points to the entire package. Will the EFSF bonds have a coupon, and how much wider than France should they trade? If the 2 year EFSF bond had the same 2% coupon as the Greek bonds, it could trade above par. If it is a zero, the value is more like 97%. In the end that is just rounding error on the package value.
More details to come. Again, I find it hard to see why you would agree if you aren’t a bank and it looks like they are prepared to pay holdouts at par.
By the time the deal is sorted out in mid March, we may have had enough data that the plan would already be obsolete.