Negotiators for Greece investors announce tentative deal
(ATHENS, Greece) — Greece and its private investors are close to a deal that will significantly reduce the country's debt and pave the way for it to receive a much-needed €130 billion bailout.
Negotiators for the investors announced the tentative agreement Saturday and said it could become final next week. Under the agreement, the investors would take a hit of more than 60 percent on the €206 billion of Greek debt they own.
Here's how it would work: private investors would receive new bonds whose face value is half of the existing bonds. The new bonds would have a longer maturity and pay an average interest rate of slightly less than 4 percent (compared with an estimated 5 percent on the existing bonds). Without the deal, which would reduce Greece's debt load by at least €120 billion, the private investors' bonds would likely become worthless. Many of these investors also hold debt from other eurozone countries, which could also lose value in the event of a Greek default.
Read more: http://www.time.com/time/world/article/0,8599,2105626,00.html#ixzz1ko92OAiV
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Looks like 50% haircut for the investors. I wonder what the Greeks will need to give up.
