Bloomberg News

Greek Bondholder NPV Loss May ‘Of Course’ Exceed 50%, IIF Says

January 09, 2012

Jan. 9 (Bloomberg) -- The net present value loss faced by participants in a Greek debt swap may “of course” exceed 50 percent, said Frank Vogl, a spokesman for the Institute of International Finance, in an e-mailed statement.

The face value loss will remain 50 percent, Vogl said, as was agreed by banks and policy-makers in October as part of the European Union’s second rescue package for Greece. Vogl said some recent articles in the press had confused the nominal reduction and the net present value loss.

“There is no reason to suggest that this has changed,” said Vogl. “The final NPV loss that private investors and creditors may agree with as a result of the finalization of all of the details, including the coupon and the maturity structure of the restructuring, could of course exceed 50 percent.”

The IIF represents more than 450 global financial institutions, and its managing director, Charles Dallara, is co- chairman of the creditors’ steering committee taking part in discussions on the swap.

To contact the reporter on this story: Rebecca Christie in Brussels at rchristie4@bloomberg.net

To contact the editor responsible for this story: Frank Connelly at fconnelly@bloomberg.net


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