Greek Debt Swap Talks End on Friday; No Deal Made

Sign Up to receive Email Alerts for all the market-moving FLASH Headline Reports

Greek Debt Swap Talks End on Friday; No Deal Reached

According to Reuters citing a Greek finance minister, debt swap talks ended on Friday without a deal being made. The talks will most likely resume on January 18, according to those familiar with the situation.

Greece is currently in talks with its bondholders in an attempt to increase the haircut taken on existing bonds. The current agreement is for a 50% haircut, though Greece is pushing for an increase.

Hedge funds involved in the talks are shying away from negotiations as they would like to see Greece default so they can collect on the credit default swaps they bought, though the WSJ says that debt restructuring talks are “completely on track.”

However, other sources indicate that the talks have broken down in an acrimonious fashion.

The leader of talks for private bond holders, the Institute of International Finance (IIF), said Friday, "Discussions with Greece and the official sector are paused for reflection."

"Unfortunately, despite the efforts of Greece's leadership, the proposal put forward ... has not produced a constructive consolidated response by all parties."

A source close to the Greek task force team was also less than optimistic, "Yesterday we were cautious and confident. Today we are less optimistic."

At risk here is the issue of a default. Should Greece not come to an agreement with bondholders, they would unlikely be able to access further aid from the EU/ECB/IMF and would have little choice but to default.

 

  S& P 500 - Intraday

 

Remember, you are in control your email alerts! You can receive alerts for more than 25 free research report alerts including: The “10.0” Report, The Insiders Report, ETF Leaders Report, and The Focus List.