A deal on the involvement of the private sector (PSI) in the Greek debt swap is finally expected this weekend, as the bondholders’ negotiators have arrived in Greece to seal the agreement and Athens has confirmed that the fundamental terms of a deal are already in place.
“The main PSI parameters are ready,” government spokesman Pantelis Kapsis said in an interview with Real FM radio on Friday: “For the deal to be completed though, there must be agreement on the new bailout program. These are the talks taking place with the troika and I think we are in the final phase.”
Charles Dallara, managing director of the International Institute of Finance, and Jean Lemierre, a senior adviser to the chairman of BNP Paribas SA, have come to Athens, an IIF spokesman confirmed on Friday.
Dallara and Lemierre are co-chairmen of the creditors’ steering committee negotiating a debt accord with Greece.
In the Greek capital they will join Josef Ackermann, the IIF chairman and chief executive at Deutsche Bank.
Kathimerini understands that the model chosen will provide the new bonds with an average interest rate of 3.4 percent for the first few years, rising to 3.7 percent later.
There are two offers that Athens and the private sector are converging on: The first is for the new bonds to have a 30-year maturity period, although Greece will repay them earlier, when it can, and the second is for a staggered maturity period depending on the time each old bond was to mature.
Private creditors and Athens are also pushing for so-called official sector involvement, or OSI, and Bloomberg confirmed on Friday that the European Central Bank is examining ways to participate in the debt haircut.
Under one plan, the ECB could sell its Greek bonds to the European Financial Stability Facility at the price it paid for them rather than accept a loss along with private creditors, Bloomberg said, citing eurozone officials. The EFSF is against that proposal because it may stretch its capacity, the officials said.
Another plan is for euro-area central banks to give up profits or take losses on Greek bonds in their investment portfolios. Several options are under informal consideration and none have gained traction so far, two of the officials said.