Tuesday, March 06, 2012

Greek Update: Collective action clause

by Calculated Risk on 3/06/2012 12:22:00 PM

From the Financial Times: Greece threatens default on PSI holdouts

The Greek public debt management agency said in a statement that Athens “does not contemplate the availability of funds to make payments to private sector creditors that decline to participate in PSI”.

The threat is aimed in particular at the 14 per cent of investors who own Greek bonds issued under international law.
excerpt with permission
And the details from Financial Times Alphaville: Now witness the firepower of this fully armed and operational collective action clause, etc
The Republic’s representative noted that Greece’s economic programme does not contemplate the availability of funds to make payments to private sector creditors that decline to participate in PSI. Finally, the Republic’s representative noted that if PSI is not successfully completed, the official sector will not finance Greece’s economic programme and Greece will need to restructure its debt (including guaranteed bonds governed by Greek law) on different terms that will not include co-financing, the delivery of EFSF notes, GDP-linked securities or the submission to English law.
The deadline is Thursday, March 8th.