Greek Debt Haircut Still Not finalised

Bank Of Greece Protest Riot Shield

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Bond holders of Greek debt have reportedly made their “maximum” offer and are now waiting for E.U. leaders to approve the deal, Bloomberg’s Maria Petrakis reports. Although progress has been made over the weekend to refinance Greece’s debt, the country remains at odds over the yield of new bonds it will issue holders taking losses.

Those bond holders had hoped for yields over 4.0%, but Greece is hoping for them to be in the low 3.0% range.

Charles Dallara, managing director of the Institute of International Finance, and the man representing the creditors in talks, said that creditors had put in their final bids, but would not comment on exact terms.

Already, creditors have agreed to 50% losses on Greek debt. However, after further deterioration in the country, Greek and E.U. leaders are hoping the country can issue lower coupon bonds on the swapped securities. 

Greece is under pressure to restructure its debt, as it is a requirement to receive the next piece of aid from the International Monetary Fund. The country has a €14.5 billion payment due on March 20.

Some investors are reluctant to take the losses, and instead prefer a default that would trigger credit default swap payments. Those agreements could pay one hundred cents on the dollar to many funds, instead of the 35 to 40 cents currently expected under these terms.

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