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Greece Fails To Make Another IMF Loan Payment But It Is Tonight's Samurai Bond That Everyone Is Watching

Tyler Durden's picture




 

Moments ago, in what was a generally expected development, taking advantage of Grimbo and the IMF's tacit grace period following the June 30 default to Christine Lagarde, and perhaps in an indication of just how serious Greece truly is to honor its creditor committments (not really: it just shows that without additional creditor funds, Greece can never repay its creditors), Reuters reported that Greece will not meet a 450 million euro ($496.7 million) loan repayment to the International Monetary Fund that falls due on Monday given its severe cash crunch, citing two sources close to the issue.

Reuters adds that the missed payment will follow a 1.6 billion euro payment to the IMF which Greece also missed paying last month, making it the first advanced economy to ever be "in arrears" with the fund - the IMF's official euphemism for default. The head of the debt agency, Stelios Papadopoulos declined to comment.

However, it was not today's IMF (non) repayment that traders, if not Eurocrats and economists, are concerned about but tonight's maturity of a JPY 20 billion (about $160 million) Samurai note sold in 1995 and which matures on July 14. The reason why this paltry, in the grand scheme of things, payment is critical is that while continuing to repay the IMF is not an event of default if only purely technically, and for the rating agencies, a non-payment on the Samurai bond would start a cross-default cascade.

As Bloomberg reported in June: "If the Samurai bond isn’t paid, it could cause a cross default on other public bonds,” said Ryosuke Kaneko, a credit analyst in Tokyo at Mizuho Securities Co., a unit of Japan’s third-biggest bank. If Greece can’t repay the IMF at the end of the month, then “market participants may start focusing on the Samurai bond as a trigger,” he said.

It is unclear whether the cross-default cascade would also impact the ECB's bond holding and for the first time impair the European central bank's Greek SMP holdings.

In the meantime, if the current trading price of the Samurai bonds due in 24 hours (at par) is any indication, the market is clearly not assuming a repayment is the base case...

... unless of course this just happens to be the highest IRR opportunity available in 2015 should Greece, by some miracle, make the payment.

 

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Mon, 07/13/2015 - 12:43 | 6306736 This is it
This is it's picture

Wow! More popcorn worthy entertainment?

Mon, 07/13/2015 - 12:48 | 6306756 knukles
knukles's picture

I will gladly pay you Tuesday if you give me the money to pay you back, today.

Mon, 07/13/2015 - 12:53 | 6306794 Manthong
Manthong's picture

This one will get paid even if it has to come out of Janet Yellen's pocket change.

Mon, 07/13/2015 - 12:59 | 6306841 Tom Servo
Tom Servo's picture

Maybe they should rename it to the Seppuku bond...

 

 

Mon, 07/13/2015 - 13:04 | 6306873 Bullionaire
Bullionaire's picture

Nope - bukkake bond.

Mon, 07/13/2015 - 13:39 | 6307050 Vampyroteuthis ...
Vampyroteuthis infernalis's picture

Just default already. End the farce and jam it up the ECB/IMF's ass!

Mon, 07/13/2015 - 15:30 | 6307536 StackShinyStuff
StackShinyStuff's picture

+100 yen

Mon, 07/13/2015 - 13:13 | 6306920 Stackers
Stackers's picture

Featuring the Greekzu wonder blade

It slices

It dices

It chops

It cuts through a metal can and still slices through technocrat new world order dreams with ease !

Mon, 07/13/2015 - 15:42 | 6307603 J Jason Djfmam
J Jason Djfmam's picture

Are these Samurai bonds backed by Ninja loans?

Mon, 07/13/2015 - 12:51 | 6306779 KnuckleDragger-X
KnuckleDragger-X's picture

No problem, the BoJ will do what they are doing to everything else and pretend it doesn't exist........

Mon, 07/13/2015 - 12:45 | 6306744 Glass Seagull
Glass Seagull's picture

 

 

 

BTFNWOT!

(Buy the fucking NWO takeover!)

 

Mon, 07/13/2015 - 12:46 | 6306751 Flounder
Flounder's picture

If somebody doesn't think a big shit storm could start as a result of all this, then they are high.

Mon, 07/13/2015 - 13:32 | 6306881 Headbanger
Headbanger's picture

Yeah but I am high precisely cause of that reason.

Not that I need one either...

Mon, 07/13/2015 - 13:21 | 6306951 Good bi bull
Good bi bull's picture

then i guess we are all high

Mon, 07/13/2015 - 14:39 | 6307284 redd_green
redd_green's picture

A completely manufactured one, ok.

Mon, 07/13/2015 - 12:48 | 6306755 slaughterer
slaughterer's picture

Buy the "suicide samurai" right now if you believe in the EU.  Selling it is anyway deemed subject to criminal prosecution under new EU law. 

Mon, 07/13/2015 - 21:57 | 6308971 Telemakhos
Telemakhos's picture

Well, if you did buy while the price was low due to doubt, then you'd be a rich man now.

Mon, 07/13/2015 - 12:52 | 6306785 youngman
youngman's picture

I thought the IMF gives you money to pay them back...seems good to me...or a little crazy...Ill take crazy and stupid

Mon, 07/13/2015 - 12:53 | 6306790 Stimorolgum
Stimorolgum's picture

Many pensioners are loosing their savings to Greece. Sweden alone lost 300 million euro from retirement funds invested in Greece.

Mon, 07/13/2015 - 13:07 | 6306894 BurningFuld
BurningFuld's picture

Why on earth would you fucking invest in Greece?

Mon, 07/13/2015 - 13:55 | 6307108 agstacks
agstacks's picture

fear of nailguns?

Mon, 07/13/2015 - 14:42 | 6307306 redd_green
redd_green's picture

No one has.  its all fake IMF money.

Mon, 07/13/2015 - 14:41 | 6307301 redd_green
redd_green's picture

Stimorolgum:  complete lies.   Not a penny of anyones savings or pension money was lent to anyone.  The IMF "money" was created from nothing, as is all credit money these days.  Its a very sick scare tactic.   Greece has defaulted on its bonds, and no one anywhere was affected ... except the Greek citizens.

Mon, 07/13/2015 - 12:54 | 6306805 ydderf1950
ydderf1950's picture

wtf is a samurai bond

Mon, 07/13/2015 - 13:01 | 6306854 Tom Servo
Tom Servo's picture

sounds racist...

 

Mon, 07/13/2015 - 13:00 | 6306848 Winston Churchill
Winston Churchill's picture

One up from the Sepuku bond.

Mon, 07/13/2015 - 13:41 | 6307056 Gab Timov
Gab Timov's picture

"From one default know ten thousand defaults." - ancient samurai banker saying

Mon, 07/13/2015 - 14:18 | 6307217 MsCreant
MsCreant's picture

Rehypothecated.

I'm sure if we can just get everyone in the same room, it will all balance out. We'll have chairs, play some music, it will be nice.

Mon, 07/13/2015 - 14:21 | 6307070 Cold-Pragmatism
Cold-Pragmatism's picture

The issue is not about it being a "Samurai Bond", the important issue here is the rider on the bond. Samurai Bonds contain riders, the fine print if you will, and one of the most popular rider is the "cross-default cascade" that is the issue.

Let me explain, Japan allows foreign entities, like Governments (alla Greece) and companies (alla, ahemm, Goldman), to buy and sell bonds in Japan in yen, this is called a Samurai Bond. So a foreign company or country can SELL bonds in YEN to someone. Why do this? Well if you're a country and you are in desperate need of investment, since Japan has low interest rates, you could go buy a Samurai Bond, that way you have some cash, and pay low interest rates! Let's take for example Greece and say, hmmm, let me see, we'll pick a company at random, Goldman! Greece could sell a bond to Goldman, in yen of course, and Goldman will hand over money to Greece (in Japan), Greece takes this money back home (after it is exchanged to euros of course), and they have capital! Of course they have to pay interest on the Samurai from time to time, in yen of course.

Now where things get interesting and devilish is as follows. Normally, when you have a Samurai Bond you also have a rider on it stating that, if the entity that sells the bond, in our case Greece, happens to default on paying a bond to anyone else in any another jurisdiction in the world, they trigger an automatic recall of the Samurai Bond. That is, the Samurai Bond that Greece sold to Goldman must be paid back in full immediately. How about that little rider!

So if Greece has a lot of Samurai Bonds, and little birdies tell me that they don't have just a few, then if for any reason GREECE DOES ALL OUT DEFAULT ON ANY BOND ANYWHERE IN THE WORLD...ALL SAMURAI BONDS WILL FORFEITURE AND BE CALLED IN AT ONCE!....OK YOU IDIOTS IN THE EUROGROUP DID ANYONE DO THAT CALCULATION TODAY BEFORE THEY SETTLED ON 86 BILLION EUROS!

So you can see...the game just got more interesting. As I have stated already TWICE in previous posts...."assuming if" on several issues....this is another major "if" that could unravel everything.

Now I will give you all ONE GUESS who benefits if the Samurais are all called in! Don't all rush at once now...

This is just another reason why, GREECE SHOULD BE KICKED OUT OF THE EU....its not about things you know about Greece that hurts you, its about the things that GREEKS HAVE YET CONFESSED TO, YOU HAVE TO BE FEARFUL OF.

Oh brother, politicians...MORONS.

So the 86 Billion Euro question for today is, what is the total value of Samurai Bonds that Greece has (The BANZAI FACTOR)? Tick tock, tick tock,...hurry now ....

BANZAI!!!

Mon, 07/13/2015 - 14:29 | 6307231 MsCreant
MsCreant's picture

If you are correct, this thing should have already been triggered when Greece missed their prior payment, yes? Or is the IMF payment not a "bond?" Is that how they get away with this till now?

The derrivatives, one way or another, will be the detonation point. Which one is the only question. 

Mon, 07/13/2015 - 15:47 | 6307403 Cold-Pragmatism
Cold-Pragmatism's picture

IMF LOANS ARE NOT BONDS.

You asked a good question, and you answered it yourself, bravo!

You see, banks like the World Bank and Goldman, are run under different rules and regulations, all because they are run on profit! So they must get their investments back, like defaulted bonds, at all costs. Important point is, companies like Goldman and JP Morgan can own Central Banks, remember all Central Banks are really private banks that are owned by other banks. That is central to big problems we have in the world. How can central banks be privately own banks, and still control the money supply? Isn't there a conflict of interest! OF COURSE THERE IS. That's the corruption that is endemic in our financial systems.

That is why banks like JP Morgan can never fail. Because they are one of the owners of the FED Reserve. So as an owner of the FED, imagine the inside knowledge you have before anything the FED does. JP Morgan and several other banks that own the FED will never die. Is that a fair competitive market? That is why Lehmann, went bust. They had no inside knowledge.

The IMF is an institution that mediates the cooperation of governments that help those in need, and is not run on profit. The IMF is basically fronting a loans office for all the governments of the developing world to hand out loans to the underdeveloped world. That's why Greece is an underdeveloped country! Anyway, that's another problem, how can the IMF hand out loans to countries when at the same time countries hand out loans too! As you can see the double-fake that goes on here. 

So imagine the IMF coming to Greece's aid and giving 20 billion say. Now let's say Hollande from France decides to give 10 Billion euros to Greece. Now on the books, France will show only 10 billion expose to Greece, and if Greece goes belly up, it will only be 10 billion. But how much expose does France have in the IMF? That is not so clear you see. And there lies the mischievous accounting that Governments do. For you see what every debt is that is defaulted by Greece that was given by the IMF, it will never be counted by the French statements of accounts. You see the IMF is a just a very sneaky way to hide losses of money by the Governments of the World. In a private enterprise, we would call this a shelf company that is loaded with bad debts, and then fold the company and wash your hands of it. Consider the IMF as the Governments version of the MAFIA. And that's exactly what the IMF is a MAFIA, but a legal one, to bankrupt countries and steal from them, while all the countries who profit from that, look good, for keeping an arms length distance. Dirty isn't it!

Anyway, in a nut shell, the whole system is corrupt. And not a single law is being used to stop this collusion and criminality. Like the Maastricht Treaty which forbids many of these things.

In short the wrong people are being put in jail, the politicians need to be all jailed, they have all broken international laws and treaties but they are not, for the police are controlled by them. How can you let criminals police themselves!

------

I just noticed your point on the derivatives. The only REAL risky derivative at this time is the CDO, the collateral debt derivative. Those that are support things like the Samurai Bonds, you read that in a newer post. CDO's are not to be worried for things like Greece. That's not a problem, the exposed value is quite small. The really big CDO nightmare is the USA. That can and will wipeout the world economy. That still has some time go, the US is not even close to losing support yet. The WILD card is the Interest Rate Swap Derivative....that is cosmological black hole, universe extinguishment level event. When will that be triggered.....when interest rates go up! But you will not see that happen....for one and only one dishonest corrupt thing. The way interest rates are now calculated have changed, they, that is governments, don't use a mean formula anymore they use a geometric mean calculation that keeps the number low. Yes it is a scam! It is governments way to control interest rates, for they know if interest rates go up, they have to pay higher pensions and etc. That is why there are housing bubbles all around the world, because no country say's they have inflation, so house prices go up as interest rates stay low. This is corruption, by the state. Bank robbers who steal $50,000 can go to jail for 20 years. But when governments steal billions they are rewarded. Every single politician knows what is going on, and they all should be in prison for life!

Personally, when national leaders do such heinous crimes against the populace, I think the death penalty should be given for high crimes.

For now the real problem is absolute debt, it must be paid down by everyone. GREECE must pay their debt with hard cold assets. Sell islands, sell buildings, sell government companies...whatever. Debt must be paid off. That is the only fix to this nightmare.

 

Mon, 07/13/2015 - 17:33 | 6308097 UggSmash
UggSmash's picture

I think I like this "Cold-Pragmatism" person. 

Mon, 07/13/2015 - 15:14 | 6307474 stewie
stewie's picture

Thanks for the 'splanin...

Mon, 07/13/2015 - 15:30 | 6307533 Cold-Pragmatism
Cold-Pragmatism's picture

Sir, you are very welcomed.

Mon, 07/13/2015 - 15:47 | 6307630 J Jason Djfmam
J Jason Djfmam's picture

Would you read that all aloud in a Dr. Strangelove voice for me?

I would find it quite entertaining.

Mon, 07/13/2015 - 12:56 | 6306813 Colonel Klink
Colonel Klink's picture

The payment will be made, even if a proxy (the US feral Federal Reserve) has to make it.

This is a non-starter.

Mon, 07/13/2015 - 13:02 | 6306861 stocktivity
stocktivity's picture

They all are non-starters.

Mon, 07/13/2015 - 13:08 | 6306896 Headbanger
Headbanger's picture

Me no tink so Herr Oberst.

Why should Greece make any payments now when the Troika is about to cut their balls off?

Mon, 07/13/2015 - 14:28 | 6307249 Colonel Klink
Colonel Klink's picture

Greeks are not the Japanese, but they're approaching parity seeing how Japan is swirling the bowl.

Mon, 07/13/2015 - 12:58 | 6306823 large_wooden_badger
large_wooden_badger's picture

Squid: "WE GOT ANOTHER ONE!"

Mon, 07/13/2015 - 13:00 | 6306844 Good bi bull
Good bi bull's picture

Just roll it over for another 20 Years. No-one cares anymore about debt.

Mon, 07/13/2015 - 14:25 | 6307241 MsCreant
MsCreant's picture

Certainly not Japan! Who wants some ugly financially failing domino, cascading through their system. Best to deny, like the radiation.

Mon, 07/13/2015 - 13:02 | 6306864 Latitude25
Latitude25's picture

Can I please get a home loan from the IMF?  I promise to pay it back.

Mon, 07/13/2015 - 13:08 | 6306897 joebren
joebren's picture

Fifty Shades of Greece

 

Mon, 07/13/2015 - 15:44 | 6307614 redd_green
redd_green's picture

Grease.

Mon, 07/13/2015 - 13:11 | 6306910 Salah
Salah's picture

Meanwhile, El Chapo  vows to kill Trump.

http://www.godlikeproductions.com/forum1/message2902632/pg1

Mon, 07/13/2015 - 13:12 | 6306914 coast
coast's picture

500 million....the federal reserve will pay it, and just give obama one less vacation to make up for it.  Or, lets see, 50 million on food stamps right? Cut their food stamps 10 dollars each, and voila, 500 million...All I see people with food stamps buy anyway is sodas, chips and candy...funny thing, they put flouride in the water to help people not get cavities (yeah right), but they give them food stamps to buy candy and sodas... hmmm

Mon, 07/13/2015 - 13:24 | 6306961 Good bi bull
Good bi bull's picture

Roll it over - make the Japanese work 23 hours a day instead of 20

Mon, 07/13/2015 - 13:23 | 6306962 Catalonia
Catalonia's picture

150m is nothing. They will pay

Mon, 07/13/2015 - 13:26 | 6306979 Osmium
Osmium's picture

Fck yeah, I got that much on me.

Mon, 07/13/2015 - 13:32 | 6307013 element115
element115's picture

Even if they don't pay, the chance for this to be labeled as a 'default' is exactly 0%.

Mon, 07/13/2015 - 13:36 | 6307035 Gab Timov
Gab Timov's picture

The truth is a'rearing its ugly head.

"We will get by." - The Grateful Dead

Mon, 07/13/2015 - 13:42 | 6307058 disabledvet
disabledvet's picture

Say hello to the Japanese Navy in the Med would appear.

Mon, 07/13/2015 - 14:46 | 6307327 all-priced-in
all-priced-in's picture

If the bond is trading at 50 something % of face value - and you wanted to pay it off - why not just buy the mother fucker on the open market?

 

 

Mon, 07/13/2015 - 15:31 | 6307545 moneylover3
moneylover3's picture

Alexander Vs Samurai

Mon, 07/13/2015 - 20:54 | 6308739 Crtrvlt
Crtrvlt's picture

Maybe Greece bought at 50 with the $ they "asked" the local municipalities to send their way ?

Sat, 08/01/2015 - 15:34 | 6379183 elizabethforbes
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