REPORT: Eurozone Fin Mins REJECT Greek Debt Deal

Graffiti Greece

[credit provider=”Milos Bicanski / Getty”]

Reuters is reporting (via ForexLive) that eurozone finance ministers have rejected a deal reached by the Greek government and its private creditors to extend maturities on Greek debt.That’s according to a eurozone official.

Evidently, the finance ministers are asking Greece’s creditors to accept a coupon of below 4% on the new Greek bonds it will swap in exchange for existing obligations.

The euro dropped sharply on the news nearing the $1.30 benchmark, but has recovered a bit since.

Managing Director of the Institute of International Finance Charles Dallara told reporters earlier today that private creditors would accept a maximum haircut on current holdings of 65% to 70%. While the details of the initial deal had not been released, those terms would probably have been part of it.

Demands by eurozone finance ministers for a more potent deal diminish further the likelihood that all Greece’s creditors will agree to participate in the swap voluntarily. Several hedge funds have already threatened to press a legal case if they are forced to stomach the losses on a “voluntary” basis without provoking a credit event.