Calamos Supports Greece
GreekReporter.comGreek NewsEconomyBank Recap Plan May be Unveiled After May 6 Election

Bank Recap Plan May be Unveiled After May 6 Election

Greece will take more time to wrap up a bank recapitalization plan it was set to unveil on April 20 and key terms may be have to wait until after a May 6 national election, government officials said on Thursday.
Banks will need billions of euros to repair the hit on their capital ratios from bond swap write downs and bad debt. While the bulk of the injection will come from a state support fund, shareholders must also pitch in for banks to stay privately run, Reuters reported.
“The terms of the recapitalization framework as regards the participation of the private sector will be clarified in the coming weeks,” a government official who did not want to be named told Reuters.
Key details of the plan, which could run up to 50 billion euros if costs to cover deposits and other related expenses of non-viable lenders are included, remain unclear.
These have to do with the pricing of bank rights issues and the coupon and maturity of contingent convertible bonds, or CoCos, that will be part of the plan. Clarity is also awaited on the terms of warrants or call options that will be used as incentives for private sector participation.
“It looks like the plan will take more time, there are pending issues to be resolved including the accounting treatment of the bond swap impact and the warrant terms,” a banker close to the talks said.
Athens has set up a capital backstop – the Hellenic Financial Stability Fund (HFSF) – to inject most of the financial support. Funded by the euro zone and the IMF, it aims to eventually resell the shares to private sector investors.
On Thursday the fund received 25 billion euros of EFSF floating rate notes from Greece΄s second rescue package for the recapitalisation.
(source: Reuters)

See all the latest news from Greece and the world at Greekreporter.com. Contact our newsroom to report an update or send your story, photos and videos. Follow GR on Google News and subscribe here to our daily email!



Related Posts