82% PSI participation, up to 96% with CAC activation

With a turnout of almost 82% without activating the CACs, the bid process for the exchange of Greek bonds was completed.

A process and a percentage based on the bonds' nominal value of 177.5 billion euro.  For bonds under foreign law, the exchange will take place in early April.

This development means that the program is successful even if the CACs are activated, which in any case will be decided by the Greek government in consultation with its European counterparts during the Eurogroup telephone meeting on Friday afternoon, where a final “haircut” of up to 96% will be achieved. This percentage does not reach the ceiling of 100% because some DEKO bonds are not included.

This development seems to vindicate the optimism earlier on Thursday  which was expressed in statements both by the IIF head Charles Dallara and Finance Minister Evangelos Venizelos alike.

Please note that the official announcements are scheduled for eight a.m. on Friday (greekbonds.gr), while a few hours later there will be a meeting of the Eurogroup and a new meeting of the cabinet with the subject of the completion of the bonds exchange. If the participation is thought to be moving along those percentages, it is possible that the Greek government, with the consent of its partners will activate the CACs.

That will mean that there is a “credit event” and thus the insurances against a default risk will be activated, estimated at an amount of about 3.5 billion. In any case, it is a development without any significant impact on the Greek economy, which is located at the lowest credit rating.

After the official announcements, there is a press conference with FinMin Evangelos Venizelos scheduled for 1pm.

On the issue of timetables, on Monday March 12th there will be a bonds exchange, while on the same day there will be a Eurogroup meeting. There is also a Working Eurogroup meeting scheduled for the 14th, which will validate the timing of installments on the new 130-billion-euro loan program. On March 15th, the Executive Board of the IMF will convene anew.