Nearly 95% of Greek Creditors Agree to Bond-Swap Deal

[Cdntrader]

Quote from Epic:

The key point is that there was never going to be a CDS default. The bond holders were not given any other choice but to participate. If they chose to fight it, they would've been forced to to participate via CAC and they situation for them would've been even worse. They still would've had to accept a bond swap, but the CAC would've triggered a CDS default and the new bonds would pretty much be worthless.

So the options were, 1) volunteer to participate and hope that the new bonds increase in value in the future or 2) be forced to volunteer and pretty much guarantee that the new bonds will be worthless.

Again, there was never going to be a default.

oh really? I guess we'll find out in hr or so when the ISDA rules.

 

[Covertibility]

Those new Greek bond yields…

What the hell was the point of this?

Austerity in a weak environment will not produce growth. The Euro is probably still too damn high for them. What happens a couple years from now when Greece defaults? And why the heck would you want to own an EFSF bond ?

 

[Martinghoul]

CDS will most likely trigger, FWIW. Everything is all priced in, however.

 

[Tsing Tao]

Funny that the new bonds are already trading at 20% of par. LOL....

How much do we want to wager that Greece can't even make it's first coupon payment?

 

[PHOENIX TRADING]

Quote from Tsing Tao:

Funny that the new bonds are already trading at 20% of par. LOL....

How much do we want to wager that Greece can't even make it's first coupon payment?

Well since they had to borrow about 1500% what they owe on march 20, chances look good they can't make the payments in the future.

 

[Tsing Tao]

Quote from PHOENIX TRADING:

Well since they had to borrow about 1500% what they owe on march 20, chances look good they can't make the payments in the future.

Shhh...don't tell the market that. Everything is rainbows and unicorns!

 

[Epic]

Quote from Cdntrader:

oh really? I guess we'll find out in hr or so when the ISDA rules.

Well, they just started their meeting a couple hours ago, so we should find out shortly. They need 12 out of 15 votes in favor of a default.

 

[Epic]

Doesn't really even matter though. A CDS trigger would only amount to about $3 billion now, which is pennies compared to what it would have been a few months ago.

 

[trade2live]

Ok I was wondering why the market was not reacting to a CDS trigger, why is it only on 3 bil and priced in ?

 

[Epic]

Quote from trade2live:

Ok I was wondering why the market was not reacting to a CDS trigger, why is it only on 3 bil and priced in ?

AFAIK, they haven't made a decision yet, but it shouldn't matter much anyway. The $3B has to do with the "voluntary" level of participation in the bond swap. Only about 15% held out for an insurance payment.