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One Day Ahead Of PSI Deadline, IIF Can Only Account For 39% Of Greek Bondholders

Tyler Durden's picture


The problem with the latest hare-brained scheme in Europe, namely to organize Greek bondholders among the various institutions that for 2 years did everything in their power to dump said Greek bonds in the open market, is that said institutions end up having no Greek bonds in inventory just at the time when they are supposed to have Greek bonds, 24 hours ahead of the Greek PSI deadline. As a reminder, participation in the PSI has to be 75%, with a CAC threshold of 66%,  and according to some interpretations even 50% of Greek bondholders voting for the PSI will be sufficient. Which means that with the PSI conclusion just around the corner, or 8 pm Athens time time tomorrow, the IIF, which is the consortium of entities that have every interest in perpetuating the status quo (i.e., do not have Europe ransom demands) and more than happy to "volunteer" for a 70%+ haircut, the IIF only has...


So according to the IIF itself, 24 hours ahead of the deadline, it does not even have a majority of bondholders accounted for, let alone the plurailty needed for CAC trigger activation. Where are the other €145 billion in Greek bondholders? Why just call up Jeff Sabin at Bingham at 212.705.7747 and find out first hand.

Here is who has agreed to participate so far:

Ageas, Allianz SE, Alpha Bank SA, Axa SA, La Banque Postale, Banco Bilbao Vizcaya Argentaria SA, BNP Paribas SA, CNP Assurances SA, Commerzbank AG, Credit Agricole SA, Credit Foncier, Dekabank Deutsche Girozentrale, Deutsche Bank AG, Dexia SA, Emporiki Bank of Greece SA, Eurobank EFG, Assicurazioni Generali SpA, Greylock Capital Management, Groupama SA, HSBC Holdings Plc, ING Bank, Intesa Sanpaolo SpA, KBC Groep NV, Marfin Popular Bank Plc, Metlife Inc., National Bank of Greece SA, Piraeus Bank SA, Royal Bank of Scotland Group Plc, Societe Generale SA and Unicredit SpA.

More from Bloomberg:

Investors with holdings amounting to 39.3 percent of the Greek bonds eligible for the nation’s debt swap agreed to sign on, moving the country closer to the biggest sovereign restructuring in history.


The 30 members of the private creditor-investor committee for Greece who plan to participate in the swap hold an aggregate 81 billion euros ($106 billion) of bonds, according to an e- mailed statement from the Institute of International Finance today. The offer ends at 8 p.m. Athens time tomorrow.


The goal of the exchange is to reduce the 206 billion euros of privately held Greek debt by 53.5 percent and turn the tide against the debt crisis that has roiled Europe for more than two years. The government said it will use collective action clauses to force holders of Greek-law bonds into the swap if necessary.


“I do fully expect to be part of the collective action clause,” Patrick Armstrong, managing partner at Armstrong Investment Managers in London, said today in a Bloomberg Television interview. He won’t voluntarily join in the swap because of the “minuscule” chance his bond maturing March 20 will be redeemed at face value.


Greece’s six largest banks plan to accept the offer, the Finance Ministry said late yesterday. Those lenders held about 42 billion euros of bonds eligible for the swap at the end of September, company reports show, making them crucial to the exchange. Greek pension funds with about 17 billion euros of debt will also join, Finance Minister Evangelos Venizelos said on Real FM Radio today

Now assuming that none of the banks have sold their bonds since Q3, and adding their holdings to the IIF's assuming no doublecounting, means that at most there is 68% participation of the entire €206 billion class. Hardly enough for the 75% participation rate.


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Wed, 03/07/2012 - 10:04 | 2231780 GolfHatesMe
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C'Mon Sabin!

Wed, 03/07/2012 - 10:07 | 2231793 GetZeeGold
GetZeeGold's picture


I would point out only missing 61% is pretty damn good for government work.



Wed, 03/07/2012 - 10:16 | 2231827 marcusfenix
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yeah, better than the TSA, who in a nation wide test, missed 70% of the banned items planted on test passengers in airports, both the scanned and groped.

government bureaucratic efficiency,like the unicorn, is a fairytale, it simply does not exist.

but it sure does cost you and me a fortune to fund the illusion. 

Wed, 03/07/2012 - 10:20 | 2231836 Comay Mierda
Comay Mierda's picture

they are radiating you in security checkpoints for no good reason. look how easy it is for this guy to go through the scanner with metallic objects.  better watch this video before youtube restricts it

Wed, 03/07/2012 - 11:05 | 2232011 Hugo Chavez
Hugo Chavez's picture

Too bad we are still in the sawkward phase where we know there is a problem but it is still not ok to shoot them.

Wed, 03/07/2012 - 11:11 | 2232041 IndicaTive
IndicaTive's picture

DAMN! And all this time I've been duct-taping weed to my taint. Easy enough to do...though removing it hurts like a bitch!

Wed, 03/07/2012 - 11:41 | 2232180 Carl Spackler
Carl Spackler's picture

It's all moot. The system broke down back in 2008, when we let a terrorist move into the White House.  

Wed, 03/07/2012 - 10:32 | 2231883 Dr. No
Dr. No's picture

Missed 70% of items and still no recent hijakings.....huh.  who would have thought?

Wed, 03/07/2012 - 10:17 | 2231831 CPL
CPL's picture

39% is the new 100%!!


Job well done everyone!  High Five!

Wed, 03/07/2012 - 10:05 | 2231781 SheepDog-One
SheepDog-One's picture

Calling all bondholders...all Greek bondholders please report in....hello?

Wed, 03/07/2012 - 10:16 | 2231826 resurger
resurger's picture

i know you are one of them!


Wed, 03/07/2012 - 10:21 | 2231842 CPL
CPL's picture

...Le numéro que vous avez atteint n'est pas en service.


<shit better check the Dutch>


Het nummer dat u hebt bereikt, is niet in dienst


<Fuck!  nobody picking up today, must be a cold out there or something.  Check with Germany>


Kunnen we over invasie?


<Crazy Krauts...I wonder if China is home>




<ummm, what?  Better call NYC to see if anyone there is up>


...the number you are calling is not in service, please hang up and try again.

Wed, 03/07/2012 - 11:22 | 2232101 DutchDude
DutchDude's picture

Dude; your German is in Dutch! We ain't paying for zee Germans ;)

Wed, 03/07/2012 - 11:25 | 2232118 CPL
CPL's picture

I always fuckup German and Dutch, lol.  Danish and Flemmish are the only language in the germanic language family that I could pick out of a conversation because it sounds so alien.

Wed, 03/07/2012 - 11:34 | 2232146 DutchDude
DutchDude's picture

Thou art forgiven ;)

Wed, 03/07/2012 - 10:47 | 2231947 johnQpublic
johnQpublic's picture

will the real greek bondholders please stand up, please stand up, and throw a middle finger on each hand up, 'cause the ECB is out of their minds and out of control, and one more time tell me how does it go?

Wed, 03/07/2012 - 11:30 | 2232137 fourchan
fourchan's picture

lol nobody wants to admit they fucked up. the holders, would rather just try to take the loss

and write it off silently. goldman, jp, citi ect its going to get real pretty damn soon.

Wed, 03/07/2012 - 10:04 | 2231782 VisualCSharp
VisualCSharp's picture

Default. C'mon, you know you want to...

Wed, 03/07/2012 - 10:05 | 2231784 azzhatter
azzhatter's picture

I'm a little confused(normally) but CNBC was claiming they had 72% as of yesterday? How are they formulating their number or just making it up?

Wed, 03/07/2012 - 10:22 | 2231845 CPL
CPL's picture

The file with the information given was pulled from the filing cabinet of ass.

Wed, 03/07/2012 - 11:34 | 2232150 fourchan
fourchan's picture

lol im useing that

Wed, 03/07/2012 - 11:08 | 2232022 swani
swani's picture

@ azzhater

Are you seriously asking if CNBC is spinning tall tales by quoting analysts or 'experts' that are spinning tall tales? PLUUUUUEASE 

Wed, 03/07/2012 - 10:05 | 2231785 chinaguy
chinaguy's picture

Who the hell cares? the ADP numbers were a beat.

Wed, 03/07/2012 - 10:06 | 2231788 Robslob
Robslob's picture



But by tomorrow morning mysteriously and magically money will come from nowhere (hint central banks) to incent people to take haircuts while funneling "backdoor" money from the people of the world...known as taxes and inflation!

Wed, 03/07/2012 - 10:15 | 2231820 resurger
resurger's picture

The Headline Tomorrow


the S&P will add 70 points

Wed, 03/07/2012 - 10:26 | 2231860 cygnetsong
cygnetsong's picture

It's a lock.  Either they will use the "interpretation" that they only need 50% participation, or they will magically find the remaining bondholders. 

My bet:  at the last minute and under the table, they will print and sell a bajillion Euros worth of bonds to Illuminatii Holdings, LLC, who would naturally participate, bringing the participation rate up to the threshold.

Wed, 03/07/2012 - 10:35 | 2231895 resurger
resurger's picture

Of course .... desperate banksters who would clutch at straws

fuck em; Say Amen

Wed, 03/07/2012 - 11:15 | 2232060 swani
swani's picture

Rehypothecated ponzi credit coming through back doors, originating from usual suspects freshly laundered through their preferred money laundering center in the City of London where there are no limits to the ponzi supporting credit creation from the endless rehypothecation of regurgitated 'collateral'.

Wed, 03/07/2012 - 10:07 | 2231791 JPM Hater001
JPM Hater001's picture

Why does this remind me of someone running around Stormwind yell "Please Join MY GUILD!!!!"

"What is your guild name?"

"Total failure."

"I'm definitely in..."

Wed, 03/07/2012 - 10:14 | 2231817 resurger
resurger's picture

The Alien Bankers from Mars will take part in the PSI, dont worry!


Wed, 03/07/2012 - 11:27 | 2232125 CPL
CPL's picture

Impress people with Dancing bear droods by the fountain in Stormwind.

Wed, 03/07/2012 - 10:07 | 2231792 Moneyswirth
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Ha Ha Ha Ha Ha Ha


Wed, 03/07/2012 - 10:09 | 2231800 Unprepared
Unprepared's picture

Deal or no deal?

Wed, 03/07/2012 - 10:13 | 2231812 SheepDog-One
SheepDog-One's picture

Missing only 60% of the bondholders? Sounds like a done deal to me! Good enough!

Wed, 03/07/2012 - 10:49 | 2231958 johnQpublic
johnQpublic's picture

for the greeks, meal or no meal?

Wed, 03/07/2012 - 10:09 | 2231801 SheepDog-One
SheepDog-One's picture

'Sugar Daddy Dating'....WINNING!

Wed, 03/07/2012 - 10:11 | 2231806 israhole
israhole's picture

Just print the money already!

Wed, 03/07/2012 - 10:14 | 2231815 SheepDog-One
SheepDog-One's picture

Yea what the hell is with all this bullshit jabber jawing and monkeying around? Just PRINT up the damn funny money already!

Wed, 03/07/2012 - 10:12 | 2231808 PaperBear
PaperBear's picture

How many deaadlines does this make ?

Wed, 03/07/2012 - 10:22 | 2231843 mendigo
mendigo's picture

Hard to keep track.
But definitely approaching final deadline - for establishing scedule for further negotiations (ie coctail hour)

Wed, 03/07/2012 - 10:24 | 2231850 CPL
CPL's picture

I lost count last year at 47.

Wed, 03/07/2012 - 10:24 | 2231854 marcusfenix
marcusfenix's picture

you see, deadline isn't actually a deadline anymore, it is now-

"date of extension agreed upon until a new date of extension is agreed upon"

and so on.

like debt, deadlines can now be rolled over pretty much forever...

Wed, 03/07/2012 - 11:49 | 2232212 Overflow-admin
Overflow-admin's picture

Hey that behaviour is inacceptable!


(same occuring where I work)



Wed, 03/07/2012 - 10:15 | 2231818 OldTrooper
OldTrooper's picture

They are going to invoke the double secret probation CAC clause.

Wed, 03/07/2012 - 10:18 | 2231835 valley chick
valley chick's picture

don't forget Plan B ! 

Wed, 03/07/2012 - 10:16 | 2231825 SheepDog-One
SheepDog-One's picture

'According to some interpretations, only 50% may be sufficient'....well its ALL Greek to me!

Wed, 03/07/2012 - 10:17 | 2231829 mayhem_korner
mayhem_korner's picture



39% is a better "accounted for" rate than MF Global

Wed, 03/07/2012 - 10:16 | 2231830 Stuck on Zero
Stuck on Zero's picture

The missing bonds were bundled with Tucson 2nd. mortgages, rated AAA, and sold off to Ben.

Wed, 03/07/2012 - 10:19 | 2231838 mayhem_korner
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They were not sold off to Ben.  They were rehypothecated to Ben from Jon.

Wed, 03/07/2012 - 10:17 | 2231834 Robslob
Robslob's picture



Instead of the movie "No Country for Old Men"

we move to

"Only Countries for Old Men"


Wed, 03/07/2012 - 10:21 | 2231840 rupeshpatel
rupeshpatel's picture

maybe the other 7 % needed could come from hedge funds holding bonds?

why is this such an impossibility? another 7 % out of the remaining 42% isnt much surely?

rupesh patel

Wed, 03/07/2012 - 10:22 | 2231844 youngman
youngman's picture

Even if they do not make the numbers,,,they will make the numbers...I think it will be ho hum tomorrow...but on Friday people will start the exit....

Wed, 03/07/2012 - 10:23 | 2231848 qzu
qzu's picture

Periphery Is Indeed Growing Steadily...PIIGS!

aka P.S.I.chopats...



Wed, 03/07/2012 - 10:23 | 2231849 Svener
Svener's picture

I believe that was an "additional" 39% on top of the already committed acceptances which makes it good to go. 


Wed, 03/07/2012 - 10:25 | 2231856 williambanzai7
williambanzai7's picture


Wed, 03/07/2012 - 10:31 | 2231873 marcusfenix
marcusfenix's picture

brilliant as always WB7.

eurowise the clown.

Wed, 03/07/2012 - 10:52 | 2231962 _ConanTheLibert...
_ConanTheLibertarian_'s picture

clown in the gutter = Van Rompass soon

Wed, 03/07/2012 - 10:35 | 2231892 mendigo
mendigo's picture


Wed, 03/07/2012 - 10:55 | 2231979 RSloane
RSloane's picture

Haha perfect, as always.

Wed, 03/07/2012 - 10:25 | 2231858 theFlyingDutchman
theFlyingDutchman's picture

No way that they will let a default of Greece happen that easily, they'll come up with something. Probable against the law, but who cares the law is only for common people. Common people aren't doing 'God's work'.

Wed, 03/07/2012 - 10:26 | 2231862 mendigo
mendigo's picture

Are we approaching an optimal solution - they loan the money and the CDS trigger and Greece defaults?
I feared God had abandoned us.

Wed, 03/07/2012 - 10:37 | 2231896 crawldaddy
crawldaddy's picture

as a kid playing monopoly, it always sucked if you got a swarmy friend who played the banker and cheated.  Who knew that as adults we would have to put up with swarmy cheating bankers in the real world as well.  and yes its sucks just as much in real life as it did playing monopoly back in the day.

Wed, 03/07/2012 - 10:36 | 2231899 Chief_Illiniwek
Chief_Illiniwek's picture

If the IIF is worried about reaching 75% participation, just ask our BLS to do the counting.

Wed, 03/07/2012 - 10:39 | 2231912 FreeNewEnergy
FreeNewEnergy's picture

39% is close to 50%, which is close to 75% needed.

Done Deal. Move on to next space on chessboard.

Wed, 03/07/2012 - 11:12 | 2232049 Roland99
Wed, 03/07/2012 - 10:41 | 2231920 The Reich
The Reich's picture

C'mon Partugal is already desparately waiting for its next infusion. Did I mention Spain? Or Italy? 

Wed, 03/07/2012 - 10:46 | 2231941 LookingWithAmazement
LookingWithAmazement's picture

They've got one whole more day to come to an agreement.

Wed, 03/07/2012 - 10:53 | 2231972 LikeClockwork
LikeClockwork's picture

Gotta be bullish


Thu, 03/08/2012 - 14:06 | 2236631 LookingWithAmazement
LookingWithAmazement's picture

One day later I turn out to be right. Duh!

Wed, 03/07/2012 - 10:52 | 2231966 1971
1971's picture

Greece default over the weekend shortly followed by US forces bombing Syria and Iran. There is profit in confusion.

Wed, 03/07/2012 - 10:53 | 2231967 1971
1971's picture

Greece default over the weekend shortly followed by US forces bombing Syria and Iran. There is profit in confusion.

Wed, 03/07/2012 - 10:56 | 2231982 Miss Expectations
Miss Expectations's picture

As a Ron Paul supporter, I kind of know how the IIF must feel.

Wed, 03/07/2012 - 10:56 | 2231984 Executioner
Executioner's picture

What a bag of cats this thing is... And it seems (at least that was the smell yesterday) that markets are deleveraging in advance. Perhaps this is a presage of what is about to transpire to financial institutions exposed to Greece?

Wed, 03/07/2012 - 10:58 | 2231987 Hugo Chavez
Hugo Chavez's picture

So i guess the playbook for voluntary exchanges is threaten anybody who does not voluntarily accept a loss with bigger losses.

The ISDA is immoral

Guess what is in store for portugal bonds next?

Oh. Then make the remainder callable for a buck and exchange before the cds auction so that cds dont pay out.

Wed, 03/07/2012 - 11:08 | 2232021 Schmuck Raker
Schmuck Raker's picture

I would like to see one of those big thermometers showing how close they are to their "pledge goal".

Like a Jerry Lewis telethon, but without the talent of course.

Wed, 03/07/2012 - 11:11 | 2232045 Roland99
Roland99's picture

Reuters is very pleased that the number is getting closer to two-thirds now.


Greek bond swap prospects lifted by pledges

Wed, 03/07/2012 - 12:18 | 2232121 swani
swani's picture

For anyone who is still wondering what will happen next. Stop wondering. Just think of what Madoff would have done if he was a primary dealer and could keep rehypothecating the same collateral instead of having to use all of the new investors' money to pay redemptions. 

When there are no consequences for fraud, extortion, reneging on contracts, rewriting constitutional agreements, breaking laws, enslaving the tax paying public to pay your trillion dollar businesses losses, bribing, lying, cheating and everything else that needs to be done to avoid TBTF insolvency, all of the above will happen in good order, and TBTF insolvency will be avoided.

Nothing to see here. This is just business as usual for the criminal banking cartel and biggest welfare recipients of the world, these guys are flying private jets, eating caviar and buying diamonds for their hookers on your tab while the puppet politicians blame the increasing debt ceiling on poor people, immigrants or whatever other convenient scape goat they can use to channel popular anger away from themselves.











Wed, 03/07/2012 - 11:39 | 2232167 thebark
thebark's picture

There is nothing to see here, move along. This is just business as usual for the criminal banking cartel and biggest welfare recipients of the world, these guys are flying private jest, eating caviar and buying diamonds for their hookers on your tab.

 Sounds like a nice gig...where can I sign up?


Wed, 03/07/2012 - 11:41 | 2232174 Downtoolong
Downtoolong's picture

We've now achieved manipulation to the fourth power. The shorts are manipulating those, who manipulated those, who manipulated those, who manipulated everything. What a great place to invest for retirement.

Wed, 03/07/2012 - 12:04 | 2232289 flyingpigg
flyingpigg's picture

Interesting to see several Italian banks are participating in the PSI haircut. 

Anyone who has a link to an overview of their Greek sovereighn debt holdings? Unicredit's exposure is already interesting enough considering their size.

Mark-to-market of the Greek bonds value might take a big hit when they have to put the bonds in their books at the newly negotiatated value. 

Wed, 03/07/2012 - 12:19 | 2232353 Yoann
Yoann's picture


Wed, 03/07/2012 - 13:29 | 2232375 Donnie Duvanie
Donnie Duvanie's picture

PSI: Take a number, ANY number. Add 150 to it. Multiply by 2. Subtract the number you started with. Add 6. Subtract the number you started with again. Divide by 2 and subtract 3. Divide by 2, again. Is the answer 75? Ok, 75%. That settles everything.

Wed, 03/07/2012 - 12:24 | 2232387 SmoothCoolSmoke
SmoothCoolSmoke's picture

Just another "fixed" vote relating to the Greek situation.  There have been so many, I've lost count.

Wed, 03/07/2012 - 12:59 | 2232538 Dr. Kananga
Dr. Kananga's picture

Hasn't it occurred to anyone that maybe--just maybe--the missing bondholders are being held/entertained at an undisclosed remote location by SPECTRE for the foreseeable future?

Hey, don't look at me like that. It's at least as plausible as the stories of a 'Greek bailout.'

Wed, 03/07/2012 - 13:03 | 2232566 Donnie Duvanie
Donnie Duvanie's picture

Collective Action Clause - A legal remedy of last resort that says bond holders have to do anything the government says. It can only be implemented when a government has been completely irresponsible, lied on numerous fronts, and frauded hundreds of billions of dollars out of individual investors, hedgefunds, pension funds, and grannies living out the rest of their lives on fixed incomes. While no incarceration is currently prescribed for those who refuse to follow the remedy, failure to adhere to Collective Action Clause demands will result in government cheating the aforementioned groups of people out of an additional 100 billion dollars (minimum).

Thu, 03/08/2012 - 07:12 | 2235288 rupeshpatel
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