News items on the PSI - The Telegraph liveblog... of course the questions are what do the hedge funds do and how many bonds do they have ?

12.36 The full list of 30 banks is as follows. Some of the banks listed have already stated their intention to participate in the bond swap:

Ageas, Allianz, Alpha Bank, AXA, Banque Postale, BBVA, BNP Paribas, CNP Assurances, Commerzbank, Credit Agricole, Credit Foncier, DekaBank, Deutsche Bank, Dexia,, Emporiki Bank of Greece, Eurobank EFG, Generali, Greylock Capital Management, Groupama, HSBC, ING, Intesa San Paolo, KBC, Marfin Popular Bank, Metlife, National Bank of Greece, Piraeus Bank, Royal Bank of Scotland, Societe Generale, Unicredit

12.35 The two banks are members of the Private Creditor-Investor Committee for Greece (PCIC), which has just issued this statement:

The members of the PCIC strongly support the recent agreements among Greece, Euro Area authorities and the IMF on a new adjustment and financing program for Greece, including the common understanding of the terms of a voluntary exchange of privately held Greek debt, as presented in the February 21, 2012 statement by the Steering Committee of the PCIC. The PCIC members also note the voluntary debt exchange offers made by the Hellenic Republic on 24 February 2012.

In this context, the following PCIC members state that they intend to participate in the debt exchange offers by tendering and, if applicable voting, securities which are the subject of these offers owned by them for their own account or their insurance technical general account amounting in aggregateto €81 billion, or 39.3% of the €206 billion total PSI eligible debt. Neither the PCIC nor any of its members makes any recommendation or offers any advice to any other holder of PSI eligible debt. Each such holder must make their own decisions on whether or not to participate in the debt exchange offers, based on their own particular interests and on the advice and assistance of their own advisers.

12.15 I wonder what the repercussions of this will be on the ordinary Greek worker...This just out on Reuters:

About 19 billion euros ($24.92 billion) in Greek government bonds managed by the country's central bank on behalf of pension funds and other state organisations will be included in Greece's debt swap plan, two sources with knowledge of the matter said on Wednesday.

"The common fund (of public law entities and social security funds) will participate in the debt swap (PSI)," said one official on condition of anonymity.

11.41 Mr Lemierre also said that creditors were treading on thin ice by trying to hold out for a better deal. Referring to a finance ministry statement issued yesterday that explicitly stated that Athens "does not contemplate the availability of funds to make payments to private sector creditors that decline to participate in PSI", he said that bondholders "risked greater losses if Greece were to not pay!"

11.32 Bankrupcy would throw Greece into extreme poverty.

That is the warning from one of the lead bank negotiators in the Greece bailout deal. In an interview with French daily le Monde, BNP Paribas'Jean Lemierre said he was uncertain of the outcome of the bond swap, but added that the consequences of a disorderly Greek default would be "extremely dangerous" for the rest of the eurozone.

but contrast the view set forth in Athens news ..... German Bank and Dutch FM not as confident as Greece's FM Venizelos


http://www.athensnews.gr/portal/11/53825

Venizelos confident that bond swap will work

7 Mar 2012

Evangelos Venizelos (Reuters) Finance Minister Evangelos Venizelos said on Wednesday that he is optimistic that Greece will get the necessary backing from its private creditors for a voluntary bond swap and that the Greek debt will fall to 120 percent of GDP "or even better" by 2020.   "We will give an active response to the Cassandras that are trying to invalidate every possible solution, such as the PSI," Venizelos said, referring to the debt writedown by its official term or public sector involvement.   He sharply criticised the boards of five of the country's social security funds that are refusing to participate in the bonds swap.   "If the PSI does not succeed, what will be the value of their bonds? Zero!" Venizelos said.   The state's private creditors have until Thursday night to decide if they will participate in a bond swap aimed at avoiding a disorderly default.   Investors must decide whether to agree to take a nominal 53.5 percent loss on their bonds as part of a bailout to plug holes in the country's finances.   Greece wants 90 percent of debt holders to take up the offer, which would help to cancel more than 100bn euros of its debt. For the swap to go ahead a majority of investors need to respond, and of these, two-thirds need to accept. But Germany's state controlled development bank KfW is concerned that Greece will not get the backing it needs for the voluntary debt swap.   German bank sceptical   The bank, which holds Greek debt with a face value of 250m euros, fears that the participation rate will be well below this threshold.   "The concern is that we will miss even the 60 percent," KfW chief executive Ulrich Schroeder in comments embargoed until Wednesday.   "As a consequence we would have a credit event, but one which is mainly uncontrolled," he said.   The comments after Dutch Finance Minister Jan Kees de Jager said that he could not give any certainty about a successful acceptance by banks of writing down Greek government debt.   De Jager's comments were in reply to questions in the Dutch parliament regarding the Greek bailout. The main bondholders group, the Institute of International Finance, has warned a disorderly default could cost the euro zone 1 trillion euros.   KfW itself will take part in the debt-swap agreement, also known as the private sector initiative (PSI). The lenders, mainly banks, insurers and investment institutions, have to reveal their intentions by Thursday night.   The government is expected to deploy collective action clauses to compel those who decline the offer to take the loss on the value of their bonds. (Reuters)