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CNBC reports that a deal on the terms of a debt swap between private Greek bondholders and the Greek government has not yet been reached.That follows reports that there will not be any press conference on a reportedly forthcoming deal between private holders of Greek bonds and the Greek government today.
The latter headline is according to a spokesperson for the International Institute of Finance, who is representing private bondholders in the talks.
European stock exchanges are slightly negative across the board. The steam appears to have gone out of U.S. rally, too, with the big three exchanges falling sharply on that news but still in the green.
We’ve been hearing rumours all morning that a deal on the terms of the credit swap had been reached or was imminent.
CNBC’s report, however, suggests that this may have been too optimistic an outlook. The IIF has been dealing with Greek, EU, and IMF officials to negotiate the deal since the initial debt swap terms were revised at October’s EU summit.
Even if a deal is reached, however, significant obstacles still stand in the way of the swap actually taking place. Hedge funds have threatened to sue if they are forced to take unwanted haircuts, particularly if the swap does not provoke a credit event.