Monday, January 30, 2012

Source: Greek deal sees 70 pct loss for investors

(AP) ? A person familiar with the negotiations to slash Greece's massive debt says private creditors participating in the deal would face an overall loss on their bondholdings of around 70 percent.

Athens and representatives of banks and other investment funds holding Greek government bonds over the weekend came close to a final deal designed to make Greece's debt sustainable. That is a precondition for further bailout money for Greece from the eurozone and the International Monetary Fund.

The person said Monday that the 70 percent loss was produced by cutting the bonds' face value in half, reducing the average interest rate to less than 4 percent and pushing repayment of the bonds decades into the future.

The person spoke on condition of anonymity because the talks are confidential.

THIS IS A BREAKING NEWS UPDATE. Check back soon for further information. AP's earlier story is below.

ATHENS, Greece (AP) ? Greek lenders Eurobank and Alpha Bank say a planned merger to create the country's largest bank by assets could be put on hold because of debt-relief negotiations between the crisis-hit country and private creditors.

The banks said Monday that "an accurate timeline cannot be given" to complete the deal announced last August because of the negotiations.

The closely watched talks would see private holders of Greek bonds cancel half their debt and likely accept additional losses in a swap for bonds with a longer maturity.

Greece's finance ministry expressed surprise at the announcement, arguing that the negotiations had produced "nothing new or different" to factors already taken into account by both banks.

Associated Press

Source: http://hosted2.ap.org/APDEFAULT/cae69a7523db45408eeb2b3a98c0c9c5/Article_2012-01-30-EU-Greece-Financial-Crisis/id-68f95680fae34a828918d31e8afac6e5

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