Final Results Of Greek CDS Auction: 21.5% Final Settlement Price

Tyler Durden's picture


The Hellenic Republic Greek CDS Auction has ended, pricing at 21.5%, just slightly less compared to the Initial Market Midpoint of 21.75 of par. As explained back in January 2009, those who had bought the Cheapest to Deliver Greek bonds trading in the teens coming into the auction, made a quick buck, as these will be taken out at a nice premium to purchase price. For those who bought at par, we can only hope they have arrangements with the ECB to fund the shortfall, especially since only the ECB can "book a profit" by buying up Greek bonds at 80 cents on the euro and seeing these terminate at 21.5. Limit buy orders that were satisfied ranged from 22.75 (where there was just under 70 million in bids by accounts using JPM and DB as dealers), all the way to 21.625, where the breaking bid was courtesy of 120 million in indicated bids, spread evenly between HSBC and Barclays: these satisfied the 291.6 Million in outstanding Open Interest. Overall, there was 3,362.7 million in total limit buy orders across the stack. The laugh of the day once again comes courtesy of an account using JPM, which submitted a total of €135 million in bids between 8 cents and 1 cents (50 million at the former). If they had been hit on that it would have made quite a payday. On the offer side, the dealers showing the biggest Physical settlement requests were HSBC with €332 million, and BNP at €158 million. And the joke of the day once again comes courtesy of RBS, which as usual seems to have one of the most "entertaining" bond trading desks: the reason for the RBS "Adjustment Amount", as speculated earlier, was that the bank's Bid of 22 was above the market midpoint of 21.75: the good news is that unlike before at least they did not confuse price and discount.

Now the question is: what happens to the holdouts, and how soon until we get i) real litigation, not class actions suits filed in German courts, by hedge funds holders of Greek bonds, and, more importantly,  ii) litigation or par payout by holders of UK-law bonds.

That said, when calculating fair value of sovereign bonds we now know: 78.5% discount.

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Mon, 03/19/2012 - 11:53 | 2269844 slaughterer
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Q: "Now the question is: .... how soon until we get i) real litigation ... by hedge funds holders of Greek bonds, and, more importantly,  ii) litigation or par payout by holders of UK-law bonds."

A: April.

Mon, 03/19/2012 - 12:00 | 2269871 Silver Bug
Silver Bug's picture

But I thought the ECB magically solved all of Greeces problems?!

Mon, 03/19/2012 - 11:54 | 2269846 GeneMarchbanks
GeneMarchbanks's picture

Litigation to ensue, bitchez!

Mon, 03/19/2012 - 12:02 | 2269878 bank guy in Brussels
bank guy in Brussels's picture

But already, a lot of the dumb people litigating ... like that 'class action' lawsuit organised by the lawyers in Germany ...

The stupid dummies are filing their Greek bond lawsuit in the American courts ...

They don't realise that the US federal judges are owned and bribed, completely - lock, stock and barrel - by the US oligarch and bankster cartel.

The US judges come directly out of the same law firms working for Goldman Sachs, JPM, the banks selling derivatives ... with the bribery cash exchanged on the golf course.

And yet all these idiots filing these lawsuits, think US courts are like in Hollywood movies.

Whereas actually, they will get the same 'justice' in US courts, as the clients who had their funds stolen at MF Global.

Or like that German guy who was kidnapped and tortured in a CIA prison, his lawyers filed a lawsuit in US courts, and he got sh*t.

Mon, 03/19/2012 - 12:15 | 2269926 GeneMarchbanks
GeneMarchbanks's picture

We're going to need a bigger boat... of lawyers.

Mon, 03/19/2012 - 12:29 | 2269975 slaughterer
slaughterer's picture

The highly-experienced, ruthless and intelligent players have not yet started to litigate. 

Mon, 03/19/2012 - 14:21 | 2270404 LawsofPhysics
LawsofPhysics's picture

What, too busy trying to "buy" politicians?

Mon, 03/19/2012 - 11:56 | 2269852 bank guy in Brussels
bank guy in Brussels's picture

If the ISDA had class, they would give bidders a 'Greek Credit Event' t-shirt designed by William Banzai.

Mon, 03/19/2012 - 11:58 | 2269866 resurger
resurger's picture

lol +1

Mon, 03/19/2012 - 12:17 | 2269927 Elwood P Suggins
Elwood P Suggins's picture

"I bought some Greek Bonds and all I got was this lousy t-shirt."

Mon, 03/19/2012 - 13:21 | 2270180 JPM Hater001
JPM Hater001's picture

"And even it's about to default"

Mon, 03/19/2012 - 11:57 | 2269862 Jayda1850
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This is the guy conservatives are rallying behind? WTF? Lets trade one big government dictator for another one, there is no hope with the two party system.

Mon, 03/19/2012 - 16:54 | 2270950 dynomutt
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Your sharing links from that site plays into that site owner's hands.

They want viral lift, which is the basis of their product offering to big product marketers and media organizations.

Some individuals in that company may have made their names on SEO and trolling (not meant as a perjorative).

This is all public information.

Be aware of that.

Mon, 03/19/2012 - 11:58 | 2269865 LawsofPhysics
LawsofPhysics's picture

More evidence that the primary dealers run the world.  Outright war against accountability.  The banks are making their move, now what will the hedge fund world do about it.  Hedge funds have lawyers while these banks have governments and militaries behind them.  Popcorn ready?

Mon, 03/19/2012 - 14:01 | 2270336 Waffen
Waffen's picture

lawyers?  there is no rule of law, so what does it matter?

Mon, 03/19/2012 - 12:00 | 2269873 jomama
jomama's picture

i'll just leave this here.

Mon, 03/19/2012 - 12:09 | 2269900 bobola
bobola's picture

The lesson here - private money is being warned not to buy sovereign bonds..??


Mon, 03/19/2012 - 12:23 | 2269943 LawsofPhysics
LawsofPhysics's picture

Yes.  So the real question is, how long can the Fed and all associated central bankers continue to print up new money and purchase sovereign debt without the very real cost for creating capital (and not adding any real value to the economy) coming home to roost?


Could be a while, especially if they all agree to declare all CDS null and void.

Mon, 03/19/2012 - 12:28 | 2269972 LookingWithAmazement
LookingWithAmazement's picture

And, Armageddon?

Mon, 03/19/2012 - 12:29 | 2269976 IEVI
IEVI's picture

Could somebody explain this further? Do CDS purchasers get paid the difference between this auction price and par? How long do the CDS issuers have to pay off the CDS holders? Will CDS purchasers have to sue to get payment from CDS issuers?

Mon, 03/19/2012 - 12:37 | 2270000 LawsofPhysics
LawsofPhysics's picture

You could have simply asked; "Will CDS holders get paid?"  The answer is no. (even if some do, it will be in seriously deflated fiat).

Mon, 03/19/2012 - 13:01 | 2270097 Mercury
Mercury's picture

Uh...yes they will. And I think you mean inflated fiat.

Mon, 03/19/2012 - 14:19 | 2270392 LawsofPhysics
LawsofPhysics's picture

No, Ben Bernanke told us all that deflation is the problem.

Mon, 03/19/2012 - 12:37 | 2269997 LookingWithAmazement
LookingWithAmazement's picture

Today EFSF auction was a big success. What euro collapse?

Mon, 03/19/2012 - 12:38 | 2270003 LawsofPhysics
LawsofPhysics's picture

Who was buying? 

Mon, 03/19/2012 - 13:59 | 2270327 Waffen
Waffen's picture

Does it matter? If everyone agrees that the emporor has clothes, what matters that he is naked?

Mon, 03/19/2012 - 14:20 | 2270399 LawsofPhysics
LawsofPhysics's picture

Exactly, all the banks holding each other's crap CDS.  They all look at each other and say "call it even?"

Rally on.

Mon, 03/19/2012 - 12:41 | 2270020 Calmyourself
Calmyourself's picture

Umm, can some one clear this up for me was today the end of the world or was it the 23rd of this month?  I want to get back the catering deposit...

Mon, 03/19/2012 - 13:58 | 2270324 Waffen
Waffen's picture

I think its time to give up on the "end of the world" stuff.   They arent gonna blow this thing up until after the election.  I never in the most extreme case did I think we would make it that far.


there is simply no rule of law and the bankers really can control this thing however they want, extend and pretend until they dont want to anymore.

Mon, 03/19/2012 - 14:46 | 2270493 Calmyourself
Calmyourself's picture

The point I have been making for some time now, no rule of law means complete and total unpredicitability but the PTB want it to go as long as possible.  I for one salute my new masters..

Mon, 03/19/2012 - 13:51 | 2270298 Die Weiße Rose
Die Weiße Rose's picture

STAMFORD, Conn. — The Royal Bank of Scotland may be one of Britain’s most bailed-out banks.

But at its American headquarters here, there is hardly a whisper of distress.

The gleaming glass and steel building — planned years before the financial crisis curbed R.B.S.’s sway over the British financial industry — now looms over Interstate 95, a scrappy challenger to another once-swaggering foreign bank, UBS of Switzerland, which put down roots near the same spot more than a decade ago.

With an outdoor terrace, a gym where workers can purchase massages and one of the largest trading floors in the world, the 11-story building would probably stir the ire of British taxpayers already reeling from a government bailout of more than $71 billion at today’s exchange rate.

But perhaps luckily for the workers here, those taxpayers are an ocean away.

R.B.S.’s Shining Star in Connecticut

Mon, 03/19/2012 - 13:57 | 2270318 Waffen
Waffen's picture

So it really is just all ho hum isnt it?

Mon, 03/19/2012 - 21:36 | 2271693 gold_bug
gold_bug's picture

Tyler, sometime back here on ZH we read that gross CDS exposure is net exposure so Armageddon is abt to unleash....

I am unable to relate events now. Can someone share thoughts...

Many thanks

Mon, 03/19/2012 - 22:13 | 2271805 reTARD
reTARD's picture

What happened to Jim Sinclair's "Ides of March"? I thought there would be fireworks. :-(

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