Greek Salade: proposta ufficiale di ristrutturazione debito
Il documento che vi proponiamo oggi è il documento ufficiale dove viene descritto nei dettagli il Piano Brady pro Grecia, ribattezzato come “Modello Sarkozy” di ristrutturazione volontaria del debito pubblico Greco.
L’autore del documento è la Fédération Bancaire Française e mi è stato girato da AnonimoCDS.
Credo sia un documento molto chiaro dove viene spiegata la ristrutturazione volontaria, sia prendendo in considezione l’ipotesi (1) 70% e sia l’ipotesi (2) 90-100%.
1) Context
French regulated investors have committed since April 2010 to maintain their holdings in existing Greek government bonds (the “Existing GGBs”). This constant support has prevented a possible systemic shock on the Greek debt market and by extension of the European government bond market.
Further to our earlier discussions, we understand that it is now critical (i) to structure a voluntary mechanism allowing Greece to reach €30bn of government financing from private investors by July 1, 2014, and (ii) to prevent credit event on Greece CDS.
2) Proposal
During the review of holders of Existing GGBs, it has become apparent that a large portion of holders are regulated investors. These investors often have different needs based on accounting, regulatory, tax and investment considerations. Flexibility in any proposed initiative is essential to maximize investor participation. For this reason, it is preferable to offer multiple options to bondholders who have varying needs and constraints.
Assumptions:
Having no specific information on the holders of the Existing GGBs (private vs. public, institutional vs. retail, amounts per individual bond per holder, etc.), we have assumed the following:
* The total Existing GGBs maturing by mid 2014 amounts to €85.5bn;
* The European Central Bank and Euro Area Central Banks hold €25bn out of the €85.5bn;
* A significant percentage – up to 80% – of the holders (the “Participants”) of the remaining €60.5bn would be willing to contribute to the proposed mechanism (i.e. up to €50bn); and
* From July 2011 to July 2014, an estimated €30bn of net financing would be provided to Greece by the Participants.
Objectives:
One of the primary success factors underpinning the European Union and the International Monetary Fund program (the “Program”) revolves around the ability of Greece to access international capital markets for debt financing. The medium-term sustainability of the Greek government debt profile and risk of future debt restructuring is of paramount concern for many investors. Further clarity, additional transparency and sharing of information between the European Union, the International Monetary Fund and investors is essential to restoring investor confidence in Greece.
The long-term investor initiative for Greece (the “Proposal”) aspires, through the provision of long-term financing, to reduce short-term stresses on the Greek debt profile and to allow Greece to focus on longer-term investments needed to generate economic growth and foster a durable recovery. The performance-based remuneration linked to Greek GDP growth further supports the spirit of cooperation between private sector investors and Greece to make economic recovery objectives a reality as soon as possible.
Description of the Proposal
The European Union and the International Monetary Fund would continue to provide new debt financing to Greece, in coordination with the commitment provided by the Participants, to support the medium-term sustainability of the Greek fiscal situation.
During the period from July 2011 until June 2014 (the “Period”), following each redemption of Existing GGBs, each Participant undertakes to participate in one of the following options.
Option 1: 30-year financing to Greece principal-guaranteed by SPV
Participants will invest a minimum of 70% of the principal amount of proceeds received (the “Received Amounts”) in new Greek government bonds, resulting in a net debt financing of at least 50% of the Received Amounts for Greece, as described below (the “New GGBpg”):
* Government bonds issued by the Hellenic Republic with a maturity at issue of 30 years;
* With a full principal guarantee by an SPV collateralised by zero-coupon bonds purchased from one or more AAA-rated sovereigns, supranational institutions or European agencies (the “Collateral”);
* Bearing interest at a rate of 5.5% plus the yearly Greek GDP growth capped at 2.5% and floored at 0% per annum; and
* Listed on an EU regulated market, but with restricted trading in the New GGBpg until 1st January 2022.
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The above structure is the favored option by investors due to accounting, regulatory and investment-eligibility constraints. Additional structures are being studied, such as structured credit options[1], but raise specific issues for the majority of regulated investors.
Option 2: 5-year Greek government bonds
Participants will invest a minimum of 90% (and preferably 100%) of the Received Amounts in new GGBs as described below (the “New GGB”):
* Government bonds issued by the Hellenic Republic with a maturity at issue of 5 years;
* Bearing interest at a rate of 5.5%[2]; and
* Listed on an EU-regulated market, but with restricted trading[3].
Benefits of the Proposal
* Collective and voluntary effort from bondholders to provide 30-year credit enhanced financing or 5-year vanilla financing for Greece at fair conditions, to complement existing support from the European Union and the International Monetary Fund, without support from European taxpayers; and
* The private-sector commitment should provide Greece with the necessary financial support to focus on the objectives provided for under the Program.
Conditions precedent and ongoing conditionality
* Informal clearance from rating agencies that the Proposal will not trigger a downgrade to default or similar status on the Hellenic Republic, Existing GGB, New GGB or New GGBpg;
* ECB’s willingness not to sell its Existing GGBs during the Period;
* A significant majority of bondholders participate as Participants;
* Greece respects its commitments under the Program; and
* The European Union and the International Monetary Fund respect their current commitments, disburse funding as provided under the Program and continue to provide assistance to promote the medium-term sustainability of the Greek fiscal situation.
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