Greece Issues Statement On PSI, Says €172 Billion Of Bonds Tendered In Swap, Will Enact CACs, ISDA To Meet At 1pm To Find If CDS Trigger

Tyler Durden's picture

The biggest sovereign debt restructuring in history is now, well, history. The headlines are finally come in:

  • GREECE ISSUES STATEMENT ON DEBT SWAP
  • GREECE COMPLETES DEBT SWAP
  • GREECE SAYS EU172 BLN OF BONDS TENDERED IN SWAP
  • GREECE GETS TENDERS, CONSENTS FROM HOLDERS OF 85.8%
  • GREECE SAYS 69% OF NON-GREEK LAW BONDHOLDERS PARTICIPATED

We learn that €152 of the €177 billion in Greek law bonds have tendered, which is 85.8%. This means that €25 billion in Greek law bonds have not - these are the hedge funds that could not be Steven Rattnered into participating, and will now sue Greece for par recoveries.This is also the number that ISDA will look at today to determine if, in conjunction with the CAC, means a credit event has occurred.

And yes, the CACs are coming, as is the Credit Event finding:

  • GREECE SAYS WILL AMEND TERMS OF GREEK LAW BONDS FOR ALL HOLDERS

As a reminder from February 24:

Finally, as we have said all along, it is the UK-law bonds that are the fulcrum security here:

  • GREECE TO EXTEND NON-GREEK LAW BOND OFFER PERIOD TO MARCH 23

And here is Veni:

«On behalf of the Republic, I wish to express my appreciation to all of our creditors who have supported our ambitious program of reform and adjustment and who have shared the sacrifices of the Greek people in this historic endeavour. With the support of our official sector and private creditors, Greece will continue implementing the measures needed to achieve the fiscal adjustments and structural reforms to which it has committed, and that will return Greece to a path of sustainable growth. Our invitations to offer to exchange, and submit consents with respect to, foreign law governed will remain open until 23 March 2012, after which there will be no further opportunity for creditors holding those instruments to benefit from the package of EFSF notes, co-financing and GDP linked securities which form an important and integral part of our invitations.»

Full release:

 

 

And ISDA is not wasting any time: it will meet at 1pm GMT to "discuss the question and to determine whether a credit event has occurred."

 

 

Finally, as a reminder, the ISDA vote today will be made by the following dealers and non-dealers. It will be up to them to decide if they wish to destroy the last trace of "integrity" of the CDS market and in effect commit institutional suicide. Because if they do in fact find that there has been no trigger event, then watch CDS bases go negative across the board, as any last pretense of CDS as a hedging instrument is thrown overboard, and the only "hedging" instrument left is to sell.

EMEA

Voting Dealers
Bank of America / Merrill Lynch
Barclays
BNP Paribas
Credit Suisse
Deutsche Bank
Goldman Sachs
JPMorgan Chase Bank, N.A.
Morgan Stanley
Societe Generale
UBS

Consultative Dealers
Citibank
The Royal Bank of Scotland

Voting Non-dealers
BlueMountain Capital (Second Term Non-dealer)
Citadel LLC(First Term Non-dealer)
D.E. Shaw Group (First Term Non-dealer)
Elliott Management Corporation (Third Term Non-dealer)
Pacific Investment Management Co., LLC (Second Term Non-dealer)

 

 

...And finally, congratulations to all Greek pensioners. You have now all been Corzined. Further instructions will be mailed in your next monthly pension statement.

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Harlequin001's picture

My gold's just gone down by...nothing...

Harlequin001's picture

Nope... Still desperately trying to give a shit and... er... no.

AbruptlyKawaii's picture

OKAYYY

how about we JSUT SAY FUCKALL CREDIT DEFAULT SWAPS ....just for fun and lkess see whahpenzz...... i mean at this point  ugootta thorw sum fiking darts

 

Hober Mallow's picture

If this ain't default I'm Tarzan once again

OOOAoaoaoaoaohhhahahh

French Frog's picture

In plain english please, what is likely to happen to stocks if ... and why:

1)if cds are triggered

2)if cds aren't triggered

Thanks in advance for any input

GetZeeGold's picture

 

 

Dammit Jim......I'm a doctor, not a financial psychiatrist.

 

 

Comay Mierda's picture

I'd rather bet on a one legged marathon runner than bet the isda will rule this a credit event. All cds are going to become worthless, and bonds rates are about to skyrocket

There is zero hedge now

economics1996's picture

This event will destroy any cheap money the US government gets.  The US government will default.  This is why ZH is looking at the CDS so closely.  This is the "Black Swan" event.

smlbizman's picture

so basically they have emptied out most their bucket so they can start filling it again...

debt is cut so they can borrow more....

GetZeeGold's picture

 

 

Rinse and repeat.....wow......that came out of left field.

 

Who wudda thunk it?

 

 

Hard1's picture

Tyler, did any of the English law bonds lived to tell?  It would be nice to get paid in full while everybody else volutarily got screwed just to prove how rotten the system has become!

Harlequin001's picture

Why doesn'y everybody just say' To hell with these pension funds, I'm not putting any more in?" Oh they can't, can they, 'cos it's tha law isn't it...

Everybody needs a 'Stakeholder' pension I say, 'cos that way everybody has a 'stake' in the future of the country, no matter how deep in shit it is, or how short lived it might be...

Comay Mierda's picture

ding ding ding

US govt default is the gigantic, ugly, smelly, elephant in the room that is eating its own shit, and NO ONE in the press is acknowledging it.

Comay Mierda's picture

ding ding ding

US govt default is the gigantic, ugly, smelly, elephant in the room that is eating its own shit, and NO ONE in the press is acknowledging it.

Pumpkin's picture

They can print it for the cost of ink and paper, or go the economical route of hitting a few keystrokes.

ElvisDog's picture

True, they can do that - once. And it will work - for a little while. And then the whole system collapses. Our whole debt-based system is dependent not only on issuing new debt but on rolling over existing debt. If the Fed/Govt really starts to go down the road of printing unsterilized currency they will almost immediately have to roll over the entire debt because there won't be any more private or foreign buyers.

economics1996's picture

"It will be up to them to decide if they wish to destroy the last trace of "integrity" of the CDS market and in effect commit institutional suicide. Because if they do in fact find that there has been no trigger event, then watch CDS bases go negative across the board, as any last pretense of CDS as a hedging instrument is thrown overboard, and the only "hedging" instrument left is to sell."

 

The key word "sell" meaning the big boys will be making a run for the exits in any paper.  This is sometimes referred to as a bond market crash.

Mentaliusanything's picture

But is only 15% that are holding out, lets make a law that says "there will be no hold outs, hold outs will not be tolerated,

After all you gave us one Euro and your getting 30% back and if you wait 30years we will give it to you, the whole 30%- promise. And for the steak knives we offer you a special dividend in any year Greece has a euro to spare.

Whats not to like- lower interest (which we will borrow) longer terms and special dividends when we are an economic power house and earn a surplus in goat meat and olive oil trades.

Banks - can't live with them and can't live without them - but they just got bailed out again

Reminds me of my EX wife. Loved me when I had it left me when I didn't and sued me for what didn't exist .............

And WON

sessinpo's picture

It will be up to them to decide if they wish to destroy the last trace of "integrity" of the CDS market and in effect commit institutional suicide. Because if they do in fact find that there has been no trigger event, then watch CDS bases go negative across the board, as any last pretense of CDS as a hedging instrument is thrown overboard, and the only "hedging" instrument left is to sell."

 

 

The key word "sell" meaning the big boys will be making a run for the exits in any paper.  This is sometimes referred to as a bond market crash.

 

This is correct. The question is always of timing - when. The CDS market is destroying itself. If ISDA does not say an event is triggered, eventually, participants will abandon this market because it is worthless and corrupt - but the question is when. If an event is triggered, then the CDS will collapse the banking system.

 

This is the same way debt is structured. CDS is simply a derivative of debt.

bdc63's picture

French Frogs:  "... what is likely to happen to stocks if cds's are triggered"

Bank stocks would fall as investors tried to figure out who is most exposed and where the contagion might be.  Everyone will be trying to figure out who the weak link banks are, and the vultures will come flying in to tear them apart -- leading likely to more QE.  I would also expect a general "risk off" trade until investors see where the chips fall.

But you know all that LTRO2 money that the banks took and then immediately turned around and redeposited it with the ECB ... well, that's likely to go to zero in short order.

Harlequin001's picture

No, only 172 Billion or so...

The rest will balloon to trillions very soon...

blu's picture

ISDA will not find an event of default (CDS issuers cannot afford to pay out) but this will have no impact on CDS markets because institutional investors will buy CDS as a hedge just as they always did, and for the very same reason --  because it is the right thing to do to protect investors.

You think there is a disconnect? There is no disconnect. This is a Ponzi operation, top to bottom, everyone has to play along in order to be paid. They are getting rich, they don't give two shits if their logic seems insane to anyone else.

French Frog's picture

Thanks to all for the various and varied points of view

Silver Bug's picture

Greece will default in the end. There is no other end result.

 

http://silverliberationarmy.blogspot.com/

number cruncher's picture

"If the consents to theproposed amendments to the Republic’s Greek law bonds are accepted, the sum of the faceamount of those bonds that will be exchanged and of the other bonds subject to theinvitations for which the Republic has received tenders for exchange and consents to theproposed amendments will total approximately €197 billion, or 95.7% of the total face amountof the bonds subject to the invitations"

This is the biggest horseshitsquared statement made by the Greek government yet. It assumes the hold outs on the non greek legislated bonds willl agree to the terms of the CaC (which can't be applied to the to the non greek legislated bonds anyway so why the feck would they agree) and they have until March 23 to think about it. FFS.. They then include the 95% figure so the 5% hold outs on the greek legislated bonds can't collect on their CDS as no Cacs will be implemented IF all the non greek legislated bonds agree to the terms of the CaC... are they for fucking real?

LowProfile's picture

 

This is the biggest horseshitsquared

+10^2 LOL

number cruncher's picture

The ISDA willno doubt say they are waiting until March 23 to see if the extra 5% of the non greek legislated boindholders can push the active participation of the PSI over 90% which does not define a credit event.

 

I hope the CDS and bond markets goes apeshit in the meantime to send a clear message DON'T FUCK WITH THE RULES

 

 

number cruncher's picture

Markit Group and Creditex Group said credit default swaps traders established initial recovery values of Northern Rock Asset Management bonds at 99.25% and 98.5%, depending on the maturity. Northern Rock triggered a restructuring credit event last year when it repurchased subordinated debt.

http://www.smartbrief.com/news/isda/storyDetails.jsp?issueid=D831DEF0-9D...©id=CB109B63-C24A-4F07-A4CB-359D611F87E5

oogs66's picture

Using the CAC is a credit Event

sodbuster's picture

Knowing that the bankers, MSM, and the Greek government are all involved spinning the info in the best possible light, I expect more than 100% participation. And those airheads on CNBS will be totally  serious when they break the "good news"!!!

Michael's picture

How much Greek debt is being discharged in this deal? In billions please.

vast-dom's picture

greece defaulted a long time ago -- they are just postponing that reality in banking delusions and profit-taking vampirism.

KickIce's picture

Same as the US.  We are among the living only due to our reserve currency status, otherwise we'd have gone Weimar long ago.

Buck Johnson's picture

Yea no kidding, wait until the pensioners see that their pension payment for next month is cut in half.  If they don't call this a credit event, then everything is a joke.

Harlequin001's picture

Not just yet thanks but maybe some other time...

jonjon831983's picture

I stayed up for this like waiting for Santa Claus....

 

Wow... So... what now?

Cdad's picture

What now?  Just about every last subordinated bond holder in Europe is looking to get CAC proof right quick.

Harlequin001's picture

No, I don't think they're going to get paid back...

Big Slick's picture

"I stayed up for this like waiting for Santa Claus...."

Did you leave out cookies and milk?  What did your letter say?

OldPhart's picture

He left me coal (sigh).

 

At least I'll have something to burn in the fireplace at the end of March.

fnord88's picture

already swapped your FRN's for gold eh?

OldPhart's picture

No, silver...gold's too pricey for me.

youngman's picture

Interesting...so they and who they are I have no idea...but they got it done.....why I do not know...boy the bankers have unlimited powers it seems...

Zgangsta's picture

Twas nothing that certain items changing hands under tables couldn't overcome.