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…
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.