AnonymousMar 22, 2012 05:50 AM
I think the international bonds will be treated different. If you have a look for example at the swiss law bond ISIN: CH0021839524
1) The bond is governed by Swiss law and even after an amendment of the terms of the bond, it will be governed by Swiss law. As far as I understood it, this bond will be not part of the ESFS co-financing agreement. (See invitation: http://www.six-swiss-exchange.com/common/official_notices/text/2012/2/75494e.txt). There will be only a reduction of the nominal amount and a increase of the maturity.
2) The bond rank already pari passu including negative pledge and cross default (see Terms & Conditions and Kontierungsinserat),
http://www.six-swiss-exchange.com/listing_notices/200506/CH0021839524_ln.pdfhttp://www.six-swiss-exchange.com/listing_notices/200506/CH0021839524_ln.pdf
so there is quite a good chance that the Greece government has immediately to pay that bond back at par (collateral agreement with Finland). Also that special account for interest rate payments should be a kind of collateral. Now you could argue that the Greek government is not willed to pay the bond back. But if this would be the case, why the Greece government should be willed to pay the bond back over the next 30 years, if the bond has the same legal status than before.
Keap in mind, that pari passu means the bonds have the same status as the bonds hold by the European central bank, the short term treasury bill (which are also not part of the PSI) and the new PSI Bonds. I don't see why any rational thinking investor should forgive more than 50% of the nominal amount and extend the maturity up to 30 years.
3) The Greece government is looking for an tax agreement with Switzerland and they want also access to black money accounts there like that "Lavrentiadis" case. Any agreement would be blocked if the court in Zurich decides, that Greece has to pay that bond
4) Bondholders: If you have a look at the syndicate Banks, who sold the bond (Credit Suisse, ABN AMRO Bank N.V., Zurich Branch, Bank Julius Baer & Co. Ltd., Bank Sarasin & Co. Ltd, Bank Vontobel AG, Bayerische Hypo- und Vereinsbank AG, Munich, Zurich Branch, BNP PARIBAS (SUISSE) SA, Cantonalbanks of Switzerland, Lombard Odier Darier Hentsch & Cie, Pictet & Cie, Rued, Blass & Cie AG, Schweizer Verband der Raiffeisenbanken and UBS AG), it looks for me quite obvious, that most of the bonds are held by private banking or wealth management account.
5) The quorum: If the Greece government wants to amend the Terms and conditions of that bond, it is necessary that 66% of the bondholders participate in the voting and 66% of them agree.
6) It is a small bond (only 650 Mio. CHF) and a short tenor 05.07.2013
I personally think there is quite a good chance that this special Swiss law bond will not participate in the PSI and will get repaid at par in July 2013. I am also privately invested in that bond.
In the beginning I made the mistake not to read the prospectus of the bonds and invested also some money in Greek law bonds. But this prospectus seems really bondholder friendly, it's just necessary to get control of 34% of the outstanding bond or to get these bondholders organized. The problem is just that maybe just a few people read this prospectus.
You can get it here:
http://www.six-swiss-exchange.com/listing_notices/200506/CH0021839524_ln.pdfhttp://www.six-swiss-exchange.com/listing_notices/200506/CH0021839524_ln.pdf
You can trade the bond at the Swiss stock exchange, but it is very limited volume. So everybody who is interested in this bond should use tight limits.
http://www.six-swiss-exchange.com/bonds/security_info_de.html?id=CH0021839524CHF4
But the Swiss stock exchange has also an open order book, which makes it a little bit easier.
http://www.six-swiss-exchange.com/orderbook_de.html?SecurityId=CH0021839524CHF4&portalSegment=BO
Have also a look at http://www.zerohedge.com/news/about-those-foreign-law-greek-bonds
Sure it is risky but let's see....
1) The bond is governed by Swiss law and even after an amendment of the terms of the bond, it will be governed by Swiss law. As far as I understood it, this bond will be not part of the ESFS co-financing agreement. (See invitation: http://www.six-swiss-exchange.com/common/official_notices/text/2012/2/75494e.txt). There will be only a reduction of the nominal amount and a increase of the maturity.
2) The bond rank already pari passu including negative pledge and cross default (see Terms & Conditions and Kontierungsinserat),
http://www.six-swiss-exchange.com/listing_notices/200506/CH0021839524_ln.pdfhttp://www.six-swiss-exchange.com/listing_notices/200506/CH0021839524_ln.pdf
so there is quite a good chance that the Greece government has immediately to pay that bond back at par (collateral agreement with Finland). Also that special account for interest rate payments should be a kind of collateral. Now you could argue that the Greek government is not willed to pay the bond back. But if this would be the case, why the Greece government should be willed to pay the bond back over the next 30 years, if the bond has the same legal status than before.
Keap in mind, that pari passu means the bonds have the same status as the bonds hold by the European central bank, the short term treasury bill (which are also not part of the PSI) and the new PSI Bonds. I don't see why any rational thinking investor should forgive more than 50% of the nominal amount and extend the maturity up to 30 years.
3) The Greece government is looking for an tax agreement with Switzerland and they want also access to black money accounts there like that "Lavrentiadis" case. Any agreement would be blocked if the court in Zurich decides, that Greece has to pay that bond
4) Bondholders: If you have a look at the syndicate Banks, who sold the bond (Credit Suisse, ABN AMRO Bank N.V., Zurich Branch, Bank Julius Baer & Co. Ltd., Bank Sarasin & Co. Ltd, Bank Vontobel AG, Bayerische Hypo- und Vereinsbank AG, Munich, Zurich Branch, BNP PARIBAS (SUISSE) SA, Cantonalbanks of Switzerland, Lombard Odier Darier Hentsch & Cie, Pictet & Cie, Rued, Blass & Cie AG, Schweizer Verband der Raiffeisenbanken and UBS AG), it looks for me quite obvious, that most of the bonds are held by private banking or wealth management account.
5) The quorum: If the Greece government wants to amend the Terms and conditions of that bond, it is necessary that 66% of the bondholders participate in the voting and 66% of them agree.
6) It is a small bond (only 650 Mio. CHF) and a short tenor 05.07.2013
I personally think there is quite a good chance that this special Swiss law bond will not participate in the PSI and will get repaid at par in July 2013. I am also privately invested in that bond.
In the beginning I made the mistake not to read the prospectus of the bonds and invested also some money in Greek law bonds. But this prospectus seems really bondholder friendly, it's just necessary to get control of 34% of the outstanding bond or to get these bondholders organized. The problem is just that maybe just a few people read this prospectus.
You can get it here:
http://www.six-swiss-exchange.com/listing_notices/200506/CH0021839524_ln.pdfhttp://www.six-swiss-exchange.com/listing_notices/200506/CH0021839524_ln.pdf
You can trade the bond at the Swiss stock exchange, but it is very limited volume. So everybody who is interested in this bond should use tight limits.
http://www.six-swiss-exchange.com/bonds/security_info_de.html?id=CH0021839524CHF4
But the Swiss stock exchange has also an open order book, which makes it a little bit easier.
http://www.six-swiss-exchange.com/orderbook_de.html?SecurityId=CH0021839524CHF4&portalSegment=BO
Have also a look at http://www.zerohedge.com/news/about-those-foreign-law-greek-bonds
Sure it is risky but let's see....
