The private creditors of Greece have accepted a Bond Swap deal, under which they are bound to lose 74% of their investment.
Details:
These investors have accepted, a bond swap such that the new bond they will have, will bear a much lower Face value and lower interest rate and longer maturity. This will lessen the burden on Greece's balance sheet by 100 billion Euros.
Imagine a scenario: You lent me INR 100 @ 8% in 2007, I promised to pay 5 years thence say today in March 2012, then God forbid, I am under crisis and unable to pay back and I say take another Credit note from me, of INR 24 and @ 6% payable in 2018. Aint it a DEFAULT?
Details:
These investors have accepted, a bond swap such that the new bond they will have, will bear a much lower Face value and lower interest rate and longer maturity. This will lessen the burden on Greece's balance sheet by 100 billion Euros.
Imagine a scenario: You lent me INR 100 @ 8% in 2007, I promised to pay 5 years thence say today in March 2012, then God forbid, I am under crisis and unable to pay back and I say take another Credit note from me, of INR 24 and @ 6% payable in 2018. Aint it a DEFAULT?
