Greece's Bond Swap Will Almost Wipe Out the Capital Base of the Country's Banks - Moody's

Greece's Bond Swap Will Almost Wipe Out the Capital Base of the Country's Banks - Moody's




News
Greece's bond swap will almost wipe out the capital base of the country's banks - Moody's
Moody's expects real loss of 25 bln euro from debt swap deal
Greece plans to recapitalize its struggling lenders in 2012 largely through common shares with restricted voting rights and convertible bonds
The swap, in which investors will trade bonds for lower-value debt securities, investors will pocket longer-dated Greek bonds worth 31.5 pct of their holdings and short-term paper issued by the EFSF equal to 15 pct of their old bonds.
The new bonds will carry an average coupon of 3.65 pct over the 30-year period and be governed by English law.
Moody's projected that overall capital needs for Greece's banking system could exceed 40 bln euros as rising non-performing loans and record unemployment take a toll on their loan books.
Quotes
"We also believe that Greek banks will continue to face elevated risks and challenges post-recapitalization, owing to their high exposure to the vulnerable sovereign and downside risks from the local economy, now in the fifth year of a recession,"
Moody's

More FOREX-news on pages InstaForex.Com