Bloomberg News

AMF Advises French Banks to Re-Examine Greek Debt Losses

October 22, 2011

Oct. 22 (Bloomberg) -- The Autorite des Marches Financiers, France’s financial-markets regulator, sent letters to the nation’s banks advising them re-examine losses on their Greek sovereign debt holdings, given that larger debt discounts are now being discussed for the country.

The lenders need to adjust their losses because the July agreement that called for 21 percent losses on Greek debt for private bondholders now appears to be void, the AMF said in a statement sent by e-mail today.

“This should result in them re-examining the discount rate on Greek sovereign bonds, taking into account all of the pertinent information available,” the regulator said in the statement.

The regulator’s letters were originally reported in the Financial Times.

European officials are considering five scenarios to update a July agreement, according to people familiar with the deliberations. They range from sticking with a voluntary swap to a so-called hard restructuring that would force investors to exchange Greek bonds for new ones at 50 percent of their value, the people said.

--Editors: Paul Verschuur, Ana Monteiro

To contact the reporter on this story: Alan Katz in Paris at akatz5@bloomberg.net.

To contact the editor responsible for this story: Melissa Pozsgay at mpozsgay@bloomberg.net.


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