Anxiety for 15,000 minor bond holders

The Finance ministry will announce on Thursday evening or Friday morning at the latest whether the bonds held by individuals will eventually be included in the process of the haircut once the process is completed.

Until then, 15,000 individuals will experience a difficult 48 hours as the final decisions will be judged by the amount of bonds to be included in the process of the PSI+. On March 9 officials will examine whether the involvement of private owners of Greek government bonds has reached 75% of the bondholders, which is the informal limit set for the activation of CACs.

According to information so far:

The government and Venizelos are thinking of not cutting the bonds of those who bought them during the public recording. For those who bought bonds of up to 100,000 euros during the period when they were issued by the Greek Republic and not later in the secondary market, their value will not decline. This is because the economy team believes that they bought these bonds for savings and not for speculative purposes. If someone has bought Greek bonds of up to 100,000 euros, they will submit them and get new papers that will be configured as follows:

- 15% of the amount with bonds expiring in 2015
- 52% of the amount with bonds expiring in 2017
- 33% of the amount with bonds expiring in 2042

All bonds will have an annual coupon at 3.4%. On the contrary, those that bought from the secondary market, regardless of the price, will receive a haircut.

According to information on protothema.gr, those who will eventually be excluded from this process are:

1.   The European Investment Bank: it funds all Eurozone countries including Greece, thus making it impossible by its statute to participate in the haircut.

2.   The Titlos of the National Bank of Greece: The former swap by Goldman Sachs of approximately 6 billion that took place in 2002 under the then “alchemies” for the Greek debt was excluded from the process. This is not a bond but a processed product. Note that it was created by Goldman Sachs, who sold it to the German Commerzbank and in 2005 it came under the control of the National Bank of Greece.

3.   Individuals from Belgium and Austria: The Greek government bonds held by individuals from Belgium and Austria are excluded as they are protected by local laws.

4.   Loans to SOEs: The government has previously guaranteed loans to loss-making companies of the public sector such as OSE, OASA and eas. As revealed by Proto Thema on Sunday, it seems that these loans will eventually be exempted from the haircut.