Wall Street Journal
March 8, 2012
THE EVENT: A crucial deadline is approaching today as Greece seeks to get commitments by its bondholders to agree to a debt-restructuring plan that will involve big losses on their holdings.
The restructuring involves debt worth €206 billion in the hands of the private sector, although the current offer is extended to holders of €177 billion of bonds under Greek law. Greece needs to secure at least 90% of that for the bond exchange to proceed on a voluntary basis.
If less than 90% of holders participate, Greece has the option of invoking collective action clauses (CACs) to force remaining holders to accept the deal. But for that to happen, at least half of the bondholders must participate in a related vote and at least two-thirds of them should vote in favor of the bond-swap terms.
Greece is optimistic that it can get a 75%-80% participation rate in the bond swap, people with direct knowledge of the matter have said, and many banks that had been saying they were still considering the matter confirmed this week that they would participate.
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