Updated version HERE
For those who breath heavily at the sight of the Greek PSI offer the official proposal is out on the www.greekbonds.gr.
After clicking the many disclaimers you come to the point were you can download all the documents in PDF form. We will publish the main points later.Furthermore the Greek Bond Holder Act that defines the "amendments" or the retrofitting of the CAC's can be found here (in Greek, it is the 4050 ΦΕΚ 36 - 23.02.2012
στις 23.02.2012
)
Finally the offer to exchange and amend the Greek bonds was launched. It is a rather complicated offer and reading it sometimes feels that its purpose is to confuse rather than enlighten the investors into making a decision. If retail or non-institutional investors try to read it, they would almost certainly suffer a stroke. Furthermore, the Invitation cannot be forwarded to interested bondholders as this is illegal. They interested parties should go to the Greek website (www.greekbonds.gr) tick on all the disclaimers and download the 166 page document and then make up their minds. And this has to be done by 9pm CET on 8th March 2012 (unless it is extended, terminated or re-opened). I doubt that many retail investors have the requisite knowledge and time to comprehend this legal document. In any case retail investors were never consulted during the process.
Finally the offer to exchange and amend the Greek bonds was launched. It is a rather complicated offer and reading it sometimes feels that its purpose is to confuse rather than enlighten the investors into making a decision. If retail or non-institutional investors try to read it, they would almost certainly suffer a stroke. Furthermore, the Invitation cannot be forwarded to interested bondholders as this is illegal. They interested parties should go to the Greek website (www.greekbonds.gr) tick on all the disclaimers and download the 166 page document and then make up their minds. And this has to be done by 9pm CET on 8th March 2012 (unless it is extended, terminated or re-opened). I doubt that many retail investors have the requisite knowledge and time to comprehend this legal document. In any case retail investors were never consulted during the process.
Designated Bonds
The total amounts
of bonds that will take part in the exercise are 205.6billion. Out of these
21.6Billion are under non Greek (domestic law). This leaves 184billion under
Greek law. Four bonds are exempt from
the exchange (total of 7.98billion). They were also exempt in the first version
of the PSI back in July 2011. We do not know the reasons. They are:
Many loans were included from OASA, OSE for a total of 5.8billion. The famous Goldman Sachs swap does which is owned by the National Bank of Greece does not seem to be in the list.
However, out of the 205.6Billion only 177.309Billion would be considered for the amendment that will introduce the CAC's.
Timeline
GR0326040236
|
2,716,000,000
|
Pharmaceutical (Zero)
|
GR0514017145
|
3,690,000,000
|
6M+130bp
|
GR0514018150
|
78,300,000
|
6M+83bp
|
GR0514019166
|
1,500,000,000
|
6M+63bp
|
Many loans were included from OASA, OSE for a total of 5.8billion. The famous Goldman Sachs swap does which is owned by the National Bank of Greece does not seem to be in the list.
However, out of the 205.6Billion only 177.309Billion would be considered for the amendment that will introduce the CAC's.
Timeline
The offer was
initiated on the 24th February and would terminate on the 8th
March. The settlement would be on the 12th March 2012. The republic
has the right to revoke the offer or extend it by 4pm CET 7th March.
For the foreign law bonds the bondholder’s meeting would be on the 24th-27th March and the settlement on the 11th April.
Mathematics of CAC’s
Here is the fun part. By choosing to participate in theexercise (with Greek law bonds) whether
you want to tender your bonds or not exchange you give irrevocable consent to amend the
bonds with the proposed CAC’s. In other words:
In order for the CAC’s to be introduced at least 50% of the total aggregate amount must participate and 2/3 must give consent. If only 88.65 billion (or 50% of the total 177.3billion) participate then only 59billion are required. Thus we should expect that the CAC would be introduced almost certainly to the Greek law bonds. Just the Greek domestic banks and funds holding may be enough to introduce the CAC’s. However, later on they say, that if the participation is less than 75% participation the whole thing is abandoned.
Greece Reserves the Right to Activate
The introduction of the CAC’s would not in itself mean that they are going to be Activated. This is somewhat conflicting if one reads carefully the Greek law 4050/12 which states that they are automatically activated. They also mention that this law (4050/12) is not incorporated by reference in this Invitation. (page 4). It is all very confusing and perhaps a clarification is needed here.
Nevertheless, the Republic in the Invitation asserts that:
For the foreign law bonds the bondholder’s meeting would be on the 24th-27th March and the settlement on the 11th April.
Mathematics of CAC’s
Here is the fun part. By choosing to participate in the
- Greek law bonds
- If you tender your securities for exchange then you automatically vote for the CAC.
- If you refuse to tender but participate then you can still vote in favour of the amendment to introduce CAC.
- If you do not vote for the CAC you cannot submit your bonds.
- If you do absolutely nothing then you do not tender any bonds and do not give your consent for the CAC. In this case you are not counted towards the CAC’s.
- For the foreign law bonds my understanding is that you have the choice to participate in the tender offer and you automatically consent to CAC’s being introduced or to vote against the introduction of the CAC’s and not tender your bonds. In the first case the meeting that is going to take place later in March (24th-27th March).
- Blocking: If you participate your securities are blocked anyway.
In order for the CAC’s to be introduced at least 50% of the total aggregate amount must participate and 2/3 must give consent. If only 88.65 billion (or 50% of the total 177.3billion) participate then only 59billion are required. Thus we should expect that the CAC would be introduced almost certainly to the Greek law bonds. Just the Greek domestic banks and funds holding may be enough to introduce the CAC’s. However, later on they say, that if the participation is less than 75% participation the whole thing is abandoned.
Greece Reserves the Right to Activate
The introduction of the CAC’s would not in itself mean that they are going to be Activated. This is somewhat conflicting if one reads carefully the Greek law 4050/12 which states that they are automatically activated. They also mention that this law (4050/12) is not incorporated by reference in this Invitation. (page 4). It is all very confusing and perhaps a clarification is needed here.
Nevertheless, the Republic in the Invitation asserts that:
- The exchange would proceed if there is 90% participation. i.e more than 185.062Billion. In this case the Republic may or may not activate the CAC’s. This would leave around 20.5Billion of Holdouts. Many of these would be the Foreign law bonds.
- If the participation is between 75% and 90% then the Republic may go ahead after consulting the official sector (Germany) to proceed with the offer. It may further activate the CAC to push the participation up to 90% or more. Here the Invitation uses the word “intents”. In other words they leave the options open.
- If the participation is less than 75% and the consent on the CAC’s is less than 75% of the total debt then the republic will not proceed with the PSI.
Issuer
|
ISIN
|
Currency
|
Coupon
|
Maturity
|
Original
|
ECB Inferred
hold
|
Percentage
|
Hellenic
Republic
|
GR0110021236
|
EUR
|
4.30%
|
20-Mar-12
|
14,433,800,000
|
4,668,187,000
|
32.3%
|
Hellenic
Republic
|
GR0124018525
|
EUR
|
5.25%
|
18-May-12
|
8,000,000,000
|
3,334,299,000
|
41.7%
|
Hellenic
Republic
|
GR0114020457
|
EUR
|
4.10%
|
20-Aug-12
|
7,719,000,000
|
3,132,968,000
|
40.6%
|
Hellenic
Railways
|
FR0000489676
|
EUR
|
4.92%
|
13-Sep-12
|
200,000,000
|
10,000,000
|
5.0%
|
Hellenic
Republic
|
GR0508001121
|
EUR
|
float
|
31-Dec-12
|
45,710,000
|
22,852,857
|
50.0%
|
Hellenic Republic
|
GR0512001356
|
EUR
|
6M+2%
|
20-Feb-13
|
5,820,000,000
|
443,278,000
|
7.6%
|
Hellenic
Republic
|
GR0110022242
|
EUR
|
4.51%
|
31-Mar-13
|
60,710,000
|
24,281,428
|
40.0%
|
Hellenic
Railways
|
XS0165688648
|
EUR
|
4.50%
|
02-Apr-13
|
430,000,000
|
17,500,000
|
4.1%
|
Hellenic
Republic
|
GR0124021552
|
EUR
|
4.60%
|
20-May-13
|
9,079,000,000
|
4,588,434,000
|
50.5%
|
Hellenic
Republic
|
GR0128001584
|
EUR
|
7.50%
|
20-May-13
|
2,497,560,000
|
1,004,866,421
|
40.2%
|
GREECE
|
XS0372384064
|
USD
|
4.63%
|
25-Jun-13
|
1,079,136,691
|
49,869,237
|
4.6%
|
Hellenic
Republic
|
GR0124022568
|
EUR
|
3.90%
|
03-Jul-13
|
410,330,000
|
84,301,000
|
20.5%
|
Hellenic
Republic
|
GR0110023257
|
EUR
|
4.43%
|
31-Jul-13
|
128,570,000
|
64,284,284
|
50.0%
|
Hellenic
Republic
|
GR0114021463
|
EUR
|
4.00%
|
20-Aug-13
|
5,850,000,000
|
2,169,751,000
|
37.1%
|
Hellenic
Republic
|
GR0124023574
|
EUR
|
4.52
|
30-Sep-13
|
299,360,000
|
150,000,000
|
50.1%
|
Hellenic
Republic
|
GR0326043263
|
EUR
|
zero
|
22-Dec-13
|
1,854,000,000
|
248,651
|
0.0%
|
Hellenic
Republic
|
GR0128002590
|
EUR
|
6.50%
|
11-Jan-14
|
4,552,000,000
|
1,853,030,412
|
40.7%
|
Hellenic
Republic
|
GR0124024580
|
EUR
|
4.50%
|
20-May-14
|
8,523,000,000
|
4,154,347,000
|
48.7%
|
GREECE
|
XS0097596463
|
EUR
|
VAR
|
21-May-14
|
70,000,000
|
1,000,000
|
1.4%
|
Hellenic
Republic
|
GR0124025595
|
EUR
|
4.50%
|
01-Jul-14
|
423,970,000
|
30,003,000
|
7.1%
|
Hellenic
Republic
|
GR0112003653
|
EUR
|
3.99%
|
25-Jul-14
|
207,140,000
|
51,782,854
|
25.0%
|
Hellenic
Republic
|
GR0114022479
|
EUR
|
5.50%
|
20-Aug-14
|
12,500,000,000
|
3,958,820,000
|
31.7%
|
Hellenic
Republic
|
GR0112004669
|
EUR
|
4.11%
|
30-Sep-14
|
114,290,000
|
28,575,713
|
25.0%
|
Hellenic
Republic
|
GR0124026601
|
EUR
|
3.70%
|
20-Jul-15
|
9,585,000,000
|
3,491,500,000
|
36.4%
|
Hellenic
Republic
|
GR0114023485
|
EUR
|
6.10%
|
20-Aug-15
|
8,000,000,000
|
3,188,300,000
|
39.9%
|
Hellenic
Republic
|
GR0114024491
|
EUR
|
3.70%
|
30-Sep-15
|
214,290,000
|
42,861,427
|
20.0%
|
Hellenic
Republic
|
GR0124027617
|
EUR
|
3.70%
|
10-Nov-15
|
424,970,000
|
50,003,000
|
11.8%
|
GREECE
|
XS0357333029
|
EUR
|
FRN
|
11-Apr-16
|
5,600,000,000
|
52,800,000
|
0.9%
|
Hellenic
Republic
|
GR0516003606
|
EUR
|
VAR
|
21-May-16
|
204,350,000
|
34,056,840
|
16.7%
|
Hellenic
Republic
|
GR0124028623
|
EUR
|
3.60%
|
20-Jul-16
|
7,750,000,000
|
2,307,593,000
|
29.8%
|
Hellenic
Republic
|
GR0116002875
|
EUR
|
4.02%
|
13-Sep-16
|
171,430,000
|
28,572,857
|
16.7%
|
Hellenic
Republic
|
GR0326038214
|
EUR
|
Zero
|
27-Dec-16
|
383,740,000
|
49,400,731
|
12.9%
|
Hellenic
Republic
|
GR0118014621
|
EUR
|
4.23%
|
01-Mar-17
|
400,000,000
|
57,142,857
|
14.3%
|
Hellenic
Republic
|
GR0528002315
|
EUR
|
6M+0.09%
|
04-Apr-17
|
4,985,000,000
|
48,000,000
|
1.0%
|
Hellenic
Republic
|
GR0118012609
|
EUR
|
5.90%
|
20-Apr-17
|
5,000,000,000
|
1,353,800,000
|
27.1%
|
Hellenic Republic
|
GR0518071916
|
EUR
|
float
|
01-Jul-17
|
83,517,000
|
11,930,645
|
14.3%
|
Hellenic
Republic
|
GR0124029639
|
EUR
|
4.30%
|
20-Jul-17
|
11,440,000,000
|
3,877,550,000
|
33.9%
|
Hellenic
Republic
|
GR0118013615
|
EUR
|
4.68%
|
09-Oct-17
|
250,000,000
|
35,714,286
|
14.3%
|
GREECE
|
XS0260024277
|
EUR
|
FRN
|
05-Jul-18
|
2,100,000,000
|
14,000,000
|
0.7%
|
Hellenic
Republic
|
GR0124030645
|
EUR
|
4.60%
|
20-Jul-18
|
7,732,000,000
|
1,856,239,000
|
24.0%
|
GREECE
|
IT0006527532
|
EUR
|
5.00%
|
11-Mar-19
|
200,000,000
|
17,117,000
|
8.6%
|
Hellenic
Republic
|
GR0124031650
|
EUR
|
6.00%
|
19-Jul-19
|
15,500,000,000
|
3,752,450,000
|
24.2%
|
Hellenic
Republic
|
GR0133001140
|
EUR
|
6.50%
|
22-Oct-19
|
8,192,000,000
|
2,016,982,997
|
24.6%
|
Hellenic
Republic
|
GR0124032666
|
EUR
|
6.25%
|
19-Jun-20
|
5,000,000,000
|
1,366,350,000
|
27.3%
|
Hellenic
Republic
|
GR0133002155
|
EUR
|
5.90%
|
22-Oct-22
|
8,930,000,000
|
1,306,698,000
|
14.6%
|
Hellenic
Republic
|
GR0133003161
|
EUR
|
4.70%
|
20-Mar-24
|
10,462,000,000
|
1,305,056,000
|
12.5%
|
Hellenic
Republic
|
GR0338001531
|
EUR
|
2.90%
|
25-Jul-25
|
8,648,344,001
|
63,440,801
|
0.7%
|
Hellenic
Republic
|
GR0133004177
|
EUR
|
5.30%
|
20-Mar-26
|
7,000,000,000
|
936,706,000
|
13.4%
|
Hellenic
Republic
|
GR0338002547
|
EUR
|
2.30%
|
25-Jul-30
|
8,344,875,000
|
100,062,350
|
1.2%
|
Hellenic
Republic
|
GR0138001673
|
EUR
|
4.50%
|
20-Sep-37
|
9,000,000,000
|
132,800,000
|
1.5%
|
GREECE
|
XS0292467775
|
EUR
|
2.09%
|
25-Jul-57
|
1,779,540,800
|
1,188,800
|
0.1%
|
