ING Says 55% May Take Part in Voluntary Greek Debt
June 3 (Bloomberg) -- About 55 percent of investors in
Greek government bonds would probably volunteer to roll over
holdings of securities maturing through 2013 to help the nation
manage its budget deficit, according to ING Groep NV.
If there was a 100 percent take-up of the proposal, Greece
would save 15 billion euros in 2011, 33 billion in 2012 and 29
billion in 2013, “which would more than cover the gap being
left by not getting back to capital markets,” Padhraic Garvey,
head of developed-market debt in Amsterdam, wrote in an e-mailed
note today. “In reality, the voluntary take-up would likely be
dominated by bank hold-to-maturity portfolios, Greek domestics
and the European Central Bank, which would mean a more likely
voluntary take-up of about 55 percent.”
Greece, recipient of a 110 billion-euro European Union and
International Monetary Fund bailout just over a year ago, faces
a potential 30 billion-euro funding gap next year with yields on
10-year bonds at more than 16 percent keeping it shut out of
debt markets.
Garvey estimates the ECB holds 45 billion euros of the
total 255 billion euros of Greek government bonds, with a
similar amount held by domestic investors. About the same is
held in banks’ hold-to-maturity portfolios, he said.
Concentrated Investment
The top 30 investors in Greek debt, including loans, own 70
percent of the total outstanding, according to Barclays Capital.
About 75 billion euros is held by central banks, of which 40
billion euros is accounted for by the ECB, Barclays said in a
research note today. Euro-region banks hold about 48 billion
euros of debt, while domestic institutions carry 90 billion
euros, about half of which is held by seven banks, Barclays
said.
“This should make it easier to negotiate and achieve a
decent success rate in any restructuring,” strategists
including London-based Julian Callow and Laurent Fransolet wrote
in the report. “Most of these holders could probably take the
hit from restructuring, with one big exception: domestic
banks.”
June 3 (Bloomberg) -- About 55 percent of investors in
Greek government bonds would probably volunteer to roll over
holdings of securities maturing through 2013 to help the nation
manage its budget deficit, according to ING Groep NV.
If there was a 100 percent take-up of the proposal, Greece
would save 15 billion euros in 2011, 33 billion in 2012 and 29
billion in 2013, “which would more than cover the gap being
left by not getting back to capital markets,” Padhraic Garvey,
head of developed-market debt in Amsterdam, wrote in an e-mailed
note today. “In reality, the voluntary take-up would likely be
dominated by bank hold-to-maturity portfolios, Greek domestics
and the European Central Bank, which would mean a more likely
voluntary take-up of about 55 percent.”
Greece, recipient of a 110 billion-euro European Union and
International Monetary Fund bailout just over a year ago, faces
a potential 30 billion-euro funding gap next year with yields on
10-year bonds at more than 16 percent keeping it shut out of
debt markets.
Garvey estimates the ECB holds 45 billion euros of the
total 255 billion euros of Greek government bonds, with a
similar amount held by domestic investors. About the same is
held in banks’ hold-to-maturity portfolios, he said.
Concentrated Investment
The top 30 investors in Greek debt, including loans, own 70
percent of the total outstanding, according to Barclays Capital.
About 75 billion euros is held by central banks, of which 40
billion euros is accounted for by the ECB, Barclays said in a
research note today. Euro-region banks hold about 48 billion
euros of debt, while domestic institutions carry 90 billion
euros, about half of which is held by seven banks, Barclays
said.
“This should make it easier to negotiate and achieve a
decent success rate in any restructuring,” strategists
including London-based Julian Callow and Laurent Fransolet wrote
in the report. “Most of these holders could probably take the
hit from restructuring, with one big exception: domestic
banks.”
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