New "uncut" bonds luring foreigners

Despite the many proposals, there is no agreement between the Greek state and bankers on the PSI.

One suggestion is that existing bonds be exchanged for cash at 15% of their value and with new bonds at 35%, but which will fall under the legal form of Troika lending, which cannot undergo any haircut.

If this proves successful, then the cut will be around 50%. Also, there has been no agreement on interest rates, where the difference between the two proposals amounted to 3 percentage points.

Note that the final result is crucial regarding the participation percentage of foreign banks and funds to avoid a credit event. For this reason, the Greek government is considering activating the Collective Action Clauses that aim at the legal cover of a generally enforced haircut.

But even in such a case, it is uncertain that a credit event will be avoided. Either way, if the government persists with very low interest rates and raises the level of the haircut at current values, then everything is possible.