The Greek government has released the official level of participation in the Private Sector Involvement (PSI). It stands at 85.8%. This is 172 billion euros out of a total of 206.
EUR/USD ticks lower to 1.3243 after the news. Update: the fall is extended to 1.3220. Support is at 1.3212. Some had expected a higher rate, given all the rumors.about the level of “voluntary” will to participate in the huge bond swap.
Not so Voluntary
Greece will need to activate the Collective Action Clauses to receive the necessary cash. Together with CACs, the sum will reach 197 billion euros, or 95.7%.
The ISDA will meet at 13:00 GMT to discuss if a credit event was triggered. There is a high chance that these will be triggered, as CAC is used to force the deal on the remainder of bondholders who didn’t “volunteer”.
The vast majority of bonds are governed under Greek law: 152 billion of such bonds received volunteers. Greece will enact CACs on these bonds.
The rest is governed under under international law, on which it cannot enact CACs. The offer on these bonds will be extended until March 23rd, a very interesting date.
The assumptions for the bailout are for a 95% participation rate.
EUR/USD traded at around 1.3260 before the publication. It reached these levels many hours before the release of this information, on high hopes for a high participation rate.
The new, swapped, bonds are already trading in the “grey” market, and hold yields that start from 17%. This means that the market see little chance that this money will ever get paid back.
The Greek finance minister, Evangelos Venizolos, could hold a press conference at 11:00 GMT to provide more details.
The Eurogroup holds a virtual meeting at 13:00 GMT to discuss the results. They still need to give their final green light to the second bailout funds.
There’s another big event today: the US Non-Farm Payrolls. See how to trade the NFP with EUR/USD.Get the 5 most predictable currency pairs