BRUSSELS- A dozen banks, insurers and investment funds holding Greece?s bonds will participate in a massive debt-relief plan for the country, the group representing the private creditors said Monday as the deadline for the deal draws near.
The statement from the Institute of International Finance comes amid concern that not enough investors will voluntarily swap their Greek government bonds for new ones with a much lower face value, longer repayment deadlines and lower interest rates.
Without the debt relief, Greece won?t get a second, $172 billion bailout from the other euro countries and the International Monetary Fund, and would face a messy default on its debts this month.
Private creditors have until Thursday night to sign up for the bond swap, which could slice as much as $141.5 billion off Greece?s $460 billion debt pile.
Investors who participate would lose around 75 percent of the value of their overall bond holdings.
But without the bailout, they would likely face much bigger losses, not only on their Greek holdings but also on investments in other vulnerable eurozone countries as turmoil spreads across the region?s financial markets.
The Institute of International Finance said the 12 big investors that have promised to participate in the plan include German insurer Allianz, French bank BNP Paribas, Germany?s Commerzbank and Deutsche Bank, as well as Greece?s Eurobank EFG and National Bank of Greece.
The banking group did not say how much Greek debt these institutions hold.
The participation of these investors doesn?t come as much of a surprise since they were closely involved in negotiating the deal. Many of them also have close links to eurozone governments, which will be funding the bailout.
The bigger question will be whether less traditional bond investors, such as hedge funds that bought the bonds at a steep discount or may stand to profit from bond-insurance payouts, will also sign up.
Tags: Debt Relief
Source: http://freedom-debtrelief.org/debt-relief-key-investors-sign-up-for-greek-debt-relief-plan-2/
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