Greek Bondholders Reduce Coupon Rate Demand
The chief negotiator for Greek bondholders said this morning that the group will accept an average coupon rate of 3.75% on the new bonds. Greece and the nation’s bondholders have been negotiating for weeks over exactly how much of a…
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The chief negotiator for Greek bondholders said this morning that the group will accept an average coupon rate of 3.75% on the new bonds. Greece and the nation’s bondholders have been negotiating for weeks over exactly how much of a haircut the bondholders would voluntarily accept and what the coupon rate would be on new Greek bonds. The haircut has been set at about 50% of face value, or about 65% of net present value. The coupon rate has been more difficult to fix.
Greece, the European Union, and the IMF have argued for a very low 2% coupon on the new bonds, saying that unless future payments are reduced Greece won’t be any better off. Bondholders had been holding out for a coupon rate of 4%.
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Paul Ausick has been writing for 247Wallst.com for more than a decade. He has written extensively on investing in the energy, defense, and technology sectors. In a previous life, he wrote technical documentation and managed a marketing communications group in Silicon Valley.
He has a bachelor's degree in English from the University of Chicago and now lives in Montana, where he fishes for trout in the summer and stays inside during the winter.