3 Feb 2015
Greek’s debt swap proposal to be positive for EMU bonds – KBC
FXStreet (Barcelona) - The KBC Bank Research Team views that the recent Greek governments proposal to seek a debt-swap instead off a write-off might be positive for EMU bond markets.
Key Quotes
“Greek FM Varoufakis changed tone yesterday after EU close. The Greek government no longer seeks debt write-off (haircut) but rather a debt swap, including two types of new bonds.”
“The first type would be GDP-linked and replace EU rescue loans. The second type would be perpetuals and replace Greek bonds owned by the ECB (SMP-portfolio).”
“IMF loans weren’t mentioned, but PM Tsipras indicated over the weekend that Greece intends to repay this creditors.”
“We think that this proposal should be positive for EMU bond markets as the Greek government pushes for a restructuring of (part) of its official debt, while leaving private sector creditors (who took a hit in 2012) outside the operation.”
Key Quotes
“Greek FM Varoufakis changed tone yesterday after EU close. The Greek government no longer seeks debt write-off (haircut) but rather a debt swap, including two types of new bonds.”
“The first type would be GDP-linked and replace EU rescue loans. The second type would be perpetuals and replace Greek bonds owned by the ECB (SMP-portfolio).”
“IMF loans weren’t mentioned, but PM Tsipras indicated over the weekend that Greece intends to repay this creditors.”
“We think that this proposal should be positive for EMU bond markets as the Greek government pushes for a restructuring of (part) of its official debt, while leaving private sector creditors (who took a hit in 2012) outside the operation.”