Bloomberg News

Greece Makes Repayment on 435M Euro Bond Coming Due Today

May 15, 2012

A pedestrian carries an umbrella past traffic outside the Greek finance ministry, center, in Athens. Photographer: Kostas Tsironis/Bloomberg

A pedestrian carries an umbrella past traffic outside the Greek finance ministry, center, in Athens. Photographer: Kostas Tsironis/Bloomberg

Greece is to repay 435 million euros ($556 million) of bonds falling due today as the nation faces new elections after leaders failed to form a government.

Greece will pay the principal and interest on foreign law notes which weren’t tendered into the country’s debt restructuring, the Athens-based Finance Ministry said in an e- mailed statement. The repayment won’t prejudice future decisions on other untendered bonds, the ministry said.

Greece swapped about 200 billion euros of its sovereign debt in March and April in the world’s biggest debt restructuring, forcing holders of notes issued under domestic law to accept a 53.5 percent loss on the face value of the bonds. The May 15 redemption is the first out of about 6.4 billion euros of notes issued under foreign law that investors refused to tender into the swap.

Prime Minister Lucas Papademos called elections after completing the restructuring and securing a 130 billion-euro Greek bailout from the European Union and International Monetary Fund, the country’s second. The May 6 poll yielded no clear winner and the country will hold repeat elections after President Karolos Papoulias failed in a last-ditch attempt to broker an agreement on a new government today.

Greece achieved a 96.9 percent participation rate on 206 billion euros of eligible debt in the bond exchange after the government legislated to insert so-called collective action clauses into notes governed by Greek law retroactively, allowing a qualified majority of investors to agree on a loss that holdouts would also be legally obliged to accept.

To contact the reporter on this story: Marcus Bensasson in Athens at mbensasson@bloomberg.net

To contact the editor responsible for this story: Craig Stirling at cstirling1@bloomberg.net


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