Thursday, 19 April 2012

Foreign Law Bonds. Post election dilemma

Yesterday the second bondholders meeting took place. Those that had voted down the amendment or had the chance to vote again in favour or against the proposed amendments. We do not know the results as yet but according to the previous votes/exchange. Of particular interest is the XS0147393861 that matures on the 15th May 2012 (in less than a month). Out of the 450million only 14.1million voted in the first meeting in favour, If the vote has gone in a similar way then the new Greek government formed after the elections on the 6th would have an interesting choice. Either they are going to stick to their line of "no money" and default or they have one way or another pay the bond. They can buy the bond in another offer but going public may outrage other bondholders who participated. Causing a moratorium and failing to pay may be the best political option for the time being. It may be too early to start paying on holdouts. Of course they can de-list the bond but dont think this matters much now-days.
Then there is the subject of the Hell.railway bonds held by ABN and possibly some other Dutch entity. They said that they are not going to participate and this may cause further problems to Greece. The next maturity(FR0000489676)  is in  13 September 2012 and out of the 190million only 6million voted yes.
We are going to find out soon. Results on this and the other bonds are coming out soon.