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Donnerstag, 22. März 2012

UBS: The debt crisis: Greek CDS settled, official loss on bonds is 78.5%

The debt crisis: Greek CDS settled, official loss on bonds is 78.5%


Dear Reader,

  • All Greek bonds issued under domestic law have been exchanged and we expect most of the foreign law bonds to be exchanged over the coming weeks.
  • Greece’s default on its bonds has triggered CDS contracts and an auction to settle all open contracts on 19 March has set the final recovery value at 21.5%, implying a total loss for Greek bondholders of 78.5%.
  • The 20 newly issued Greek bonds trade at a weighted average yield of 16.5%, implying a high risk of a second default event. In light of the need for a massive further debt reduction for Greece, we initiate coverage on the new bonds with a Sell recommendation.


Kind Regards,
UBS AG
Wealth Management Research

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