Greece Restructures Debt: It's a done deal

[Garpal Gumnut]

The Greek government says 85.8pc of bondholders have accepted bond swap offer - rising to 95.7pc after collective action clauses are triggered, securing the biggest bond restructuring and default in history.

http://www.telegraph.co.uk/finance/...596/Debt-crisis-and-Greek-bond-swap-live.html

Germany appears comfortable with the Greek Parliament's response and the restructure.

gg

 

[Starcraftmazter]

Re: Greece Restructures Debt. It's a done deal.

News outlets are getting rather ahead of themselves tonight. I don't think anyone really questioned whether it was going to happen or not - the key thing is whether it would trigger a credit default event.

The ISDA meeting starts at midnight Sydney time which will determine whether the CDS contracts will get triggered or not.

Since Greece didn't get enough of a subscription, they will be forcing bondholders to participate, and thus it should be called a default. Whether this is good or bad is not really clear.


The point is, what the EU and everyone else has been desperately trying to avoid for months on end because it will apparently crash the markets is most probably about to happen. If it does not, then the market will lose confidence in CDS contracts which is a very bad thing in itself.

There is no victory here.

 

[tinhat]

Re: Greece Restructures Debt. It's a done deal.

I like the pictures in that story.

 

[Garpal Gumnut]

Re: Greece Restructures Debt. It's a done deal.

News outlets are getting rather ahead of themselves tonight. I don't think anyone really questioned whether it was going to happen or not - the key thing is whether it would trigger a credit default event.

The ISDA meeting starts at midnight Sydney time which will determine whether the CDS contracts will get triggered or not.

Since Greece didn't get enough of a subscription, they will be forcing bondholders to participate, and thus it should be called a default. Whether this is good or bad is not really clear.


The point is, what the EU and everyone else has been desperately trying to avoid for months on end because it will apparently crash the markets is most probably about to happen. If it does not, then the market will lose confidence in CDS contracts which is a very bad thing in itself.

There is no victory here.

Thanks SCM, a reasonable point.

From here the next steps are , and I quote the WSJ.

Several steps will follow in the coming days.


Formally, Greece must consult with its euro-zone rescuers before invoking the collective-action clauses to bind all Greek-law creditors; a teleconference of euro-zone finance ministers was scheduled for 11:30 a.m. GMT on Friday.

The decision to use force means conditions will have been met to trigger credit-default swaps, insurance-like contracts that pay off when a creditor suffers losses.

A panel convened by the International Swaps and Derivatives Association, an industry group, is responsible for deciding when the swaps are triggered. The group said early Friday that the panel would meet at 1 p.m. London time.

gg

 

[Glen48]

The CDS market is about 11.4 times bigger than the world economy which is about 550 T, or was, a hell of a lot of money to be found if Greece triggers a default.

 

[Uncle Festivus]

Mmmmmm.......it's such a good thing?

Tell the existing debt holders to take a 90% haircut blowing away $138 BILLION, only to INCREASE their (Greece) debt by $33 Billion with a new loan facility of $171 Billion??

 

[Julia]

Mmmmmm.......it's such a good thing?

Tell the existing debt holders to take a 90% haircut blowing away $138 BILLION, only to INCREASE their (Greece) debt by $33 Billion with a new loan facility of $171 Billion??

+1. Hard to see what is actually achieved other than a new layer of debt.

 

[sptrawler]

IMO opinion, which is of dubious value, all this posturing has been a ploy to buy time for the institutions to quietly write down their exposure to Greece.
If Greece defaults it won't be a big deal, unless all the other pigs say we are going to default and not play ball also.
It would be difficult to explain all that money away and still keep confidence in the fiat monetary system.

 

[Trembling Hand]

Nah guys they defaulted,

http://www2.isda.org/news/isda-emea...ccurred-with-respect-to-the-hellenic-republic


Game not over....................................... yet

 

[tinhat]

oh-oh! This thread could be going for years to come.

 

[Starcraftmazter]

Mmmmmm.......it's such a good thing?

Tell the existing debt holders to take a 90% haircut blowing away $138 BILLION, only to INCREASE their (Greece) debt by $33 Billion with a new loan facility of $171 Billion??

Yes, very strange. I think the only reasonable explanation as sptrawler says is to allow private institutions to gradually write down portions of their Greek debt, as Greek's private creditors get replaced by public creditors (ie. other EU countries).

A country can take a loss like this, it won't be a catastrophe - but private institutions can't, certainly not at a time like this.


Just having a look at the ISDA document, they have determined default for all bonds (seemingly?) - written under both English and Greek law.

 

[young-gun]

A country can take a loss like this, it won't be a catastrophe

exactly what loss has greece made? they have just wiped billions of dollars from their debt simply by being completely useless. anything that stopped greece from getting what they deserved is a win for them.

the eurozone is fortunate that it wasn't one of the larger nations. they wont be far behind though.

 

[Garpal Gumnut]

exactly what loss has greece made? they have just wiped billions of dollars from their debt simply by being completely useless. anything that stopped greece from getting what they deserved is a win for them.

the eurozone is fortunate that it wasn't one of the larger nations. they wont be far behind though.

They are as someone has described pretty useless bastards, but unfortunately they hold too much debt to be allowed fail.

What they deserve and what they get are two different things.

If they get what they deserve because of their sloth and lack of governance, they will drag the rest of Europe, and us down with them.

They will pay in the long run for an economy based on kickbacks and an incestuous public service.

Give these bludgers a break and let them comply with the Euro Banks demands.

gg

 

[Starcraftmazter]

exactly what loss has greece made?

I mean other eurozone countries can take the loss of Greek defaulting on all it's debt held by their governments.

 

[Uncle Festivus]

A country can take a loss like this, it won't be a catastrophe - but private institutions can't, certainly not at a time like this.

Just having a look at the ISDA document, they have determined default for all bonds (seemingly?) - written under both English and Greek law.

I don't think it can - they still have $1.1 TRILLION in debt...........

exactly what loss has greece made? they have just wiped billions of dollars from their debt simply by being completely useless. anything that stopped greece from getting what they deserved is a win for them.

the eurozone is fortunate that it wasn't one of the larger nations. they wont be far behind though.

But they haven't wiped off any debt - it's actually gotten far worse with the new loans.

Greece has already technically defaulted the first time they needed a bailout - it's all about contagion containment now - Portugal then Spain then the rest.......it's happening now!

 

[Starcraftmazter]

I don't think it can - they still have $1.1 TRILLION in debt...........

Read up one post, I'm not talking about Greece...

 

[Julia]

Greece has already technically defaulted the first time they needed a bailout - it's all about contagion containment now - Portugal then Spain then the rest.......it's happening now!

Yes. I put this link up on another thread. Probably more relevant here.
http://www.businessspectator.com.au...tent=21197&utm_campaign=kgb&modapt=commentary

 

[notting]

'What are you looking at me for?
We just made 130 billion euros by lying on the beach!
You guys are the ones who are no good at business.' Thought Mr Venizelos
“The problem here is that the Greek society now after a very long period of sacrifices needs something, a good word, a positive indication,” Venizelos said.
How bout we give every one a pay rise on the government!

 

[young-gun]

I mean other eurozone countries can take the loss of Greek defaulting on all it's debt held by their governments.

sorry misinterpreted.

I don't think it can - they still have $1.1 TRILLION in debt...........



But they haven't wiped off any debt - it's actually gotten far worse with the new loans.

Greece has already technically defaulted the first time they needed a bailout - it's all about contagion containment now - Portugal then Spain then the rest.......it's happening now!

if greece owed 250 bill, and now owe 100 bill to the same people(approx), then they have wiped debt. investors have taken a loss to help out the fools - mind you it was in the best interest of most of them bond holders. yeah yeah i know they also now owe money elsewhere, but its been restructured to lessen the impact of such huge debt burden. not to mention they are now paying less on the original bonds. they're most certainly done for.

no one can argue that greece technically defaulted a long time ago.