So There’s Just One More Thing About Greece
Just when you thought it was safe to finally stop paying attention to Athens, we have a pretty important event occurring on Thursday of this week with regards to the Greek bailout.
Thursday is the day that private Greek bond holders have to agree to exchange their current bonds for longer dated bonds with lower interest rates.
This is important for two reasons: First, unless 66% of the private bond holders agree to the voluntary swap, the entire debt renegotiation is void (and so is the Greek bailout, because the private bond holders are an integral piece to the entire package). Second, if less than less than 75% of the private debt holders agree to the voluntary swap, that will trigger “Collective Action Causes.”
CAC’s are basically laws passed in the Greek Parliament last week that would force those private bondholders to swap their debt, voluntary or not (it would basically say they aren’t going to pay the old bonds and instead will pay them what the new bonds state) . . .
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