(BN) Venizelos Says Greek Debt Swap Is Best, Only Offer for Investors

Posted by on Mar 5, 2012 in Uncategorized | No Comments

He is still afraid of triggering CDS and just said that with a high enough percentage they won’t.

Low participation – back to the drawing board and everyone in same boat.

Medium participation – we CAC you, you get same as everyone else.

High Participation, but not 100%, get paid par, because we don’t want to CAC and if we don’t CAC we sure as hades won’t default (either that or he is confused).

I think some game theory, number crunching computers just broke down trying to figure this one out.  So far I don’t see any economic threat (for non regulated, central bank dependent institutions) for holding out, and you were just told they are so afraid of triggering CDS you might get paid – or I guess they could just pass a new tax code or something that lets them pay you par and tax it at 100% and withhold the “tax” at time of payment.



Venizelos Says Greek Debt Swap Is Best, Only Offer for Investors
2012-03-05 15:00:28.982 GMT
     (See EXT4 for more on Europe’s debt crisis).


By Maria Petrakis and Marcus Bensasson
     March 5 (Bloomberg) — Greece expects bondholders to accept
a one-time offer to write off about 100 billion euros ($140
billion) of Greek debt and is ready to force them to participate
if necessary, Finance Minister Evangelos Venizelos said.
     “This is the best offer,” Venizelos said in a Bloomberg
Television interview with Nicole Itano in Athens today. “This
is the best offer because this is the only one, the only
existing offer.”
     The European Union is facing its first test in its attempt
to turn the page on the two-year debt crisis as Greece’s private
creditors decide whether to sign off on the biggest sovereign-
debt restructuring in history. The success of the 106 billion-
euro swap, confirmed on the eve of last week’s European Union
summit, depends on how many investors agree to the writedown by
the March 8 deadline.
     “This is the critical week,” Venizelos said.
     Twelve banks and investors, including National Bank of
Greece SA, BNP Paribas, Commerzbank AG and Deutsche Bank AG,
said today they planned to take up the offer, according to an e-
mailed statement from the Institute of International Finance. At
the same time, Germany’s DSW investor protection group advised
private sector bondholders to reject the Greek bond offer.


                       Participation Rate
     The Greek government has set a 75 percent participation
rate as a threshold for proceeding with the transaction, in
which investors will forgive 53.5 percent of their principal and
exchange their remaining holdings for new Greek government bonds
and notes from the European Financial Stability Facility. Euro-
area finance ministers last week authorized the EFSF to issue
bonds for the swap.
     Erik Nielsen, chief global economist at UniCredit SpA in
London, said enough creditors will probably participate in the
writedown to avoid triggering so-called collective action
clauses, which could be used by Greece to compel investors to
participate and roil markets by triggering credit-default swap
insurance contracts.
     “If we can avoid the triggering of CDSs this is the best
solution,” said Venizelos. “With a near universal
participation it’s not necessary to activate CACs. But this
clause exists in our legal order and we are ready to implement
the legislation if necessary.”
     Euro-area finance ministers will hold a teleconference on
March 9 to review the deal’s outcome.


For Related News and Information:
European regulation news: TNI EUROPE RULES <GO>
European crisis monitor: CRISIS <GO>
European Debt Crisis New: EXT4 <GO>


–With assistance from Patrick Donahue in Berlin. Editors: Alan
Crawford, James Hertling


To contact the reporter on this story:
Maria Petrakis at +30-210-741-9080 or


To contact the editor responsible for this story:
Stephen Foxwell at +44-20-7392-0572 or sfoxwell@bloomberg.net