Mar 05


- Oops: ECB Says Greek PSI Participation May Fall Short, As Troika Expects Third Greek Bailout (ZeroHedge, Mar 4, 2012):

Following up on Peter’s summary of the if-then conditional analyses to be conducted concurrently by various classes of Greek bondholders ahead of Thursday’s PSI deadline (even as Bingham is rapidly organizing a Greek ad hoc ‘holdout’ committee to stop the PSI), here is some news that may obviate pretty much everything, and goes back to our warning from January, namely that despite all the sturm und drang, media fanfare, and threats from former Goldman-cum-JPM bankers, the hedge funds will ‘just say no’ and courtesy of basis packages (yes, the fact that Greek CDS soared to a record 76 pts upfront on Friday indicates more buyers than sellers) hold out for par recoveries in court: they would be idiots (or have a gun at their head) not to do so. To wit from Bloomberg: “Greece may fail to garner enough investors to participate in a voluntary writedown of its debt, Der Spiegel magazine reported, citing unnamed officials at the European Central Bank. A second Greek bailout is partly tied to investors’ agreeing to the writedown by a March 8 deadline.” Remember that Germany has made it very, very, very explicit that if the PSI fails, the bailout is off… just as they have planned from the get go.

We will post the Spiegel article asap. And while we wait, here is something else very special from Spiegel:

Troika expects third rescue package for Greece

The billions from the second bailout did not even have arrived in Greece, since international inspectors already have a third payment required. According to SPIEGEL information is the so-called Troika believes that another 50 billion euros would be needed

The financial controllers of the EU Commission, European Central Bank and the International Monetary Fund hold a third rescue package for Greece to be necessary. They quantify the extent to SPIEGEL information on up to 50 billion €.

It is not guaranteed that the country as planned as early as 2015 could again get their own loans, it said in a recent draft of the Troika report on the situation in Greece. Therefore, the country from 2015 to 2020 may be an “external financing needs of up to 50 billion euros.” This analysis unpleasant apparently liked some politicians do not: The passage was deleted also under pressure from the German government.

Officially immediate concern is that Greece receives the second aid package of € partners and the International Monetary Fund, more than 130 billion euros. The Assembly has already approved the rescue package. Before the money is paid, must agree to the government in Athens, but first with the private creditors on the debt waiver. For this purpose they should exchange their Greek government bonds with new debt securities. The average debt is considered one of the most important points in the rescue plan for Greece.

More here

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