Second Greek Re-Bailout: Terms, Conditions And Next Steps

Tyler Durden's picture


Below are the main points agreed to by Greece to re-secure the €130b bailout, first agreed upon in July 2011, courtesy of Bloomberg.

  • Debt-swap to start in the next few days; involves swap for EFSF bonds; new bonds pay a coupon of 2.0% until 2014, 3.0% from 2015 to 2020, then 4.3%
  • 53.5% haircut for investors vs 50%
  • ECB’s profits from Greek bonds disbursed to national central banks, to be deployed to reduce Greek debt
  • Successful PSI operation a necessary condition for a success of the program: now this is an issue, since the PSI will almost certainly fail and CACs will have to be enforced which bring up our question - is the usage of CACs in the "bailout" a Material Adverse Change clause, and is thus the loophole for collapsing the deal altogether?
  • Remains to be seen if “slightly harsher” PSI terms are enough to trigger CDS, UBS says
  • Greece’s government has reserved right to enact CACs


  • IIF says PSI would be the largest ever sovereign debt restructuring
  • UBS FX strategist Geoffrey Yu notes that IIF appeared to stop short of giving the deal full endorsement, calling on members to consider it “carefully”
  • Euro area, IMF to provide additional EU130b to 2014
  • Interest rates on borrowing cut to 150bps vs 200-300bps
  • Greek parliament to vote on a constitutional provision to ensure debt servicing payments prioritized
  • Quarterly interest rate payments to be paid into a segregated account
  • A permanent ‘troika’ task force will be in Greece to ensure adherence to the terms and conditions of the package
  • Greek debt/GDP now targeted at 120.5% in 2020
  • Analysis by IMF, European officials shows debt/GDP may only fall to 160% by 2020 vs 120.5% target
  • Eurogroup to reconvene in early March on debt swap


  • German parliament will seek to approve deal Feb. 27
  • Finland expects to discuss bailout in week of March 12
  • Dutch Finance Minister Jan Kees de Jager has mooted possibility of waiting until after Greek elections (expected April 8), according to Rabobank
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Tue, 02/21/2012 - 08:08 | 2180300 Benedict Farse
Benedict Farse's picture

Psyops = PSI - oops!

Tue, 02/21/2012 - 08:10 | 2180303 mammoth mo
mammoth mo's picture

We have agreed to make a deal.  Sort of.


Tue, 02/21/2012 - 08:10 | 2180304 navy62802
navy62802's picture

What about the PSI portion of this thing? Don't the Greeks still have to get an agreement with the private groups? Or has that already been resolved?

Tue, 02/21/2012 - 08:11 | 2180305 jcaz
jcaz's picture

Good luck on that debt/GDP ratio- it's already 20%+ off from six months ago....

Tue, 02/21/2012 - 08:12 | 2180308 Dick Darlington
Dick Darlington's picture

And here's our favorite propaganda blowhorn:

Greek Economy to Rebound as Bailout Approved, IIF's Dallara Says

 Feb. 21 (Bloomberg) -- Greece will enjoy an economic
rebound now that European finance ministers approved a 130
billion-euro ($172 billion) rescue package, said Charles
Dallara, International Institute of Finance managing director.
• “It rarely happens that there is not a rebound for at least a period of 18 to 24 months, and that’s not even in the troika forecast,” he said today in a Bloomberg Television interview in Brussels. “So I’m quite optimistic there will be a rebound, and it may catch all of us by surprise”


Tue, 02/21/2012 - 08:44 | 2180381 LongSoupLine
LongSoupLine's picture

 “So I’m quite optimistic there will be a rebound, and it may catch all of us by surprise”


 “So I’m quite optimistic there will be a rebound (in several decades), and (sh)it may catch all of us by surprise”

fixed it to reflect inner thought...(i.e. - truth)

Tue, 02/21/2012 - 08:47 | 2180385 Mentaliusanything
Mentaliusanything's picture

It true, I've seen it.

Throw a dead cat hard enough at something immovable and that bitch will bounce.

Something something about Mr A Einstein.... movable object meets immovable

but Fuck what do i know - dead cats bounce.

The mans a frigging genius - give the fucker a bonus that make a lifetimes work look like a turd.

Charles I have a rope 4U.. go find a lamp post

Tue, 02/21/2012 - 08:13 | 2180310 OneEyedJack
OneEyedJack's picture

Quarterly interest rate payments to be paid into a segregated account.

So Corzine got a new job?

Tue, 02/21/2012 - 08:13 | 2180312 Poor Grogman
Poor Grogman's picture

Everything but Greek GOLD being discussed, how odd....

Tue, 02/21/2012 - 08:34 | 2180362 Ghordius
Ghordius's picture

there is not much of it and I doubt the Greek Government will be so stupid to sell it

now I just hope Gordon Brown is not going to be appointed Greek PM...

Tue, 02/21/2012 - 08:14 | 2180313 Josephine29
Josephine29's picture

Perhaps the biggest fantasy in all this is the expected economic growth in Greece from now until 2020. Take a look at this!

Last night’s further dose of fantasy Greece’s future economic growth


To get anywhere near the target established above the Euro zone had the problem that somehow it needed to “improve” the numbers. It started mildly by assuming an economic contraction of 4.3% this year and a flat outcome in 2013 although already it is probably too mild. The current figures point to a worse outcome for 2012 and if there is any evidence for a turn-around in 2013 I hope they will present it. But then we see the dark-side of such analysis as look at Greece go!

2.3%; 2.9%;2.8%;2.8%;2.6%;2.5%;2.2%

You may have spotted that they over-egged the early numbers and then cut them back! If we look forwards we see that they expect economic growth in 2030 to be 1.4% which begs a question of why it will be better in the next decade.


When's the next bailout?

Tue, 02/21/2012 - 08:19 | 2180324 disabledvet
disabledvet's picture

next week.

Tue, 02/21/2012 - 08:16 | 2180315 Jayda1850
Jayda1850's picture

The reuters article stated: "Greece said it would pass legislation that would allow it to enforce losses on bondholders who will not take part." Someone explain to me how this is voluntary and how it does not trigger CDS contracts. Utter lunacy!

Tue, 02/21/2012 - 08:14 | 2180316 PORTA PORTA
PORTA PORTA's picture

Find below the official :

Eurogroup Statement

and…. o my GOD.. they hahaha managed to start regulation on naked CDS’s… on sovereign debt…. Hell Awaits

ENJOY.. the absence of common sense. They are extremely dangerous – this make sense since they are politicians to be re-elected !

By the way i place a bet .. the EFSF does not have the Funds !! maybr June/July


Tue, 02/21/2012 - 08:50 | 2180394 Schmuck Raker
Schmuck Raker's picture

From the second link:

"In exceptional situations that threaten financial stability or market confidence in a member state or the EU, the regulation provides that competent authorities should have temporary powers to require greater transparency or to impose restrictions on short selling and credit default swap transactions or to limit individuals from entering into derivative transactions"

That could prove to be a very, very bad thing to have included in the regulations.

Much like current discussions on Retro-CACs, this might have a disproportionately universal chilling effect on all derivatives.

If I'm wrong in my interpretation let's hope I'm the only one.

Tue, 02/21/2012 - 08:16 | 2180319 digalert
digalert's picture

I think Mish got it...

nothing but a setup to convince Greeks to leave their money in banks.

Tue, 02/21/2012 - 10:33 | 2180697 taraxias
taraxias's picture

Good luck with that......

Tue, 02/21/2012 - 08:17 | 2180321 Peter K
Peter K's picture

ALEA JACTA EST, bitchezzzzz :)

Tue, 02/21/2012 - 08:24 | 2180338 disabledvet
disabledvet's picture

Again: "wake me up when General Hamm is reporting in from Athens." The railroad service was cut 9 months ago. You folks aren't even scratching the surface on the propaganda routine on how bad this really is--although at least we're the only ones in the virtually empty ballpark on "wtf is going on." the bigger story of course is that "Greece it's now appearing does truly represent a risk to the entirety of the EU framework." In spite of the amazingly creative job Super Mario has done...Trichet left him with a wrench and a shovel to fix the Space Shuttle on this one.

Tue, 02/21/2012 - 08:29 | 2180354 farmerjohn2112
farmerjohn2112's picture

You have a source for that second quote?

Tue, 02/21/2012 - 08:26 | 2180343 BudFox2012
BudFox2012's picture

I really can't even read this bullshit anymore.  I simply disgusts me.  When this whole lie finally does unravel, most sheeple are going to be caught completely unaware and will have a perpetual "deer in the headlights" look on their face

Tue, 02/21/2012 - 09:09 | 2180431 Vince Clortho
Vince Clortho's picture

ECB’s profits from Greek bonds disbursed to national central banks, to be deployed to reduce Greek debt"

Did someone say this without laughing?

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