December 5, 2011 / 12:36 PM / 8 years ago

Greece details bond swap offer-papers

* Greece provides new details on bond swap -papers

* Officials say talks ongoing, scheme not finalised

ATHENS, Dec 5 (Reuters) - Greece is offering private creditors a 4.5 percent coupon on some new paper as part of a bond swap to cut its debt by 50 percent, Greek media said on Monday, revealing new details of the plan which government officials say has not been finalised.

The heavily-indebted country is keen to wrap up talks with creditors on the so-called private sector involvement (PSI+) which is part of a bailout agreed at an Oct. 26 summit of European Union leaders to avoid bankruptcy.

A successfully concluded PSI is key to meeting next year’s target to cut the budget gap to 5.4 percent of GDP from 9 percent this year and attain a primary surplus. The bond swap would save 5.1 billion euros in interest payments in 2012.

Daily newspapers Imerisia on Monday and Kathimerini on Sunday said Greek authorities proposed that every 100 euros of bonds maturing up to 2014 be exchanged for 30 euros of new 20-year, 4.5 percent coupon paper with a 10-year grace period, combined with 20 euros in EFSF bonds.

Similarly, for every 100 euros of Greek bonds maturing from 2015 to 2020, Athens proposed 35 euros in new 30-year debt securities with a 4.5 percent coupon and a 20-year grace period along with 15 euros in EFSF bonds.

And for bonds due after 2020, private creditors are offered 40 euros in new 4.5 percent 30-year paper with a 30-year grace period and 10 euros in EFSF bonds, Kathimerini said.

The papers said that based on the proposal, the new Greek bonds would be governed by Greek law, while private creditors want to swap bonds at 50 percent of face value with new 30-year instruments bearing an 8 percent coupon.

Finance Ministry officials would not comment on the reports and said talks were ongoing.

“There are various thoughts in the talks with creditors, there is no final outcome, consultations are continuing,” a government official close to the negotiations told Reuters on condition of anonymity.

“The final offer that will satisfy the parameters agreed in October — to reduce the country’s debt by 100 billion euros and get to a debt to GDP ratio of 120 percent by 2020 remains to be seen,” the official said.

Greece’s new unity government aims for a primary budget surplus — revenues exceeding spending when debt maintenance costs are excluded — of 1.1 percent of GDP next year to start chipping away at its debt load, which is seen reaching almost 200 percent of gross domestic product in 2012 without the PSI.

On Sunday, Finance Minister Evangelos Venizelos told lawmakers during a parliamentary debate on next year’s budget that Athens must achieve full private creditor participation in the PSI+ to avoid a funding gap.

“Talks in the next months on the full implementation of the private sector involvement (PSI) to reduce Greek debt and render it viable are difficult, delicate and not without risk,” Venizelos said.

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below