PSI Participation Rate 85.8%, with CAC Activation 95.7%

The Greek Bond Swap (PSI) completed with a voluntary participation of 85.8%,  said a statement issued by the Greek Finance Ministry on Friday morning. Holders of 172 billion euros worth of bonds in total have agreed to the Greek bond exchange offer. The statement said further that 69% of non-Greek bondholders participated in the PSI. Holders of non-Greek law bonds would have the chance to PSI participation until March 23rd, 2012.

The Collective Action Clauses (CACs) will be activated for all Greek law bonds and that this activation will increase the participation to 95.7% (a total of 197 billion euro). The decision for the CACs activation will refer to Greek law bonds and will be taken during the Eurogroup teleconference today at (o100 GMT) 3 p.m. At the same time, the ISDA committee will meet to decide whether the Greek bond swap consists a ‘credit event’ and whether the CDS should be triggered.

Finance Minister Evangelos Venizelos will hold a press conference at 12:30 pm. Among others, Venizelos is expected to announce measures for 13,000 small investors holding bonds of total worth  3 billion euro. Greek media wonder whether the Finance Minister would also announce his resignation from the Greek government now that the PSI has been completed.  Venizelos is aspiring candidate for the socialist PASOK party leadership. The elections for the new leader are scheduled for March 18, 2012.

Official Statement by the Greek Finance Ministry

Athens, Greece: Evangelos Venizelos, Deputy Prime Minister and Minister of Finance of the Hellenic Republic, today announced that holders of approximately €172 billion principal amount of bonds issued or guaranteed by the Republic have tendered their bonds for exchange or consented to proposed amendments in response to the invitations and consent solicitations announced by the Republic on 24 February 2012.

Of the approximately €177 billion of bonds issued by the Republic and governed by Greek law and subject to the invitations, the Republic has received tenders for exchange and consents from holders of approximately €152 billion face amount of bonds, representing 85.8% of the outstanding face amount of these bonds. Holders of 5.3% of the outstanding face amount of these bonds participated in the consent solicitation and opposed the proposed amendments. The Republic has advised its official sector creditors that upon confirmation and certification by the Bank of Greece as process manager under the Greek Bondholder Act (Law 4050/2012), it intends to accept the consents received and amend the terms of all of its Greek law governed bonds, including those not tendered for exchange pursuant to the invitations, in accordance with the terms of the Greek Bondholder Act. Accordingly, the Republic will not extend the invitation period for its bonds governed by Greek law.

The Republic has also received tenders for exchange and consents to the proposed amendments from holders of approximately €20 billion aggregate face amount, or 69%, of its bonds issued under laws other than Greek law and of bonds issued by state enterprises and guaranteed by the Republic selected to participate in the invitations. If the consents to the proposed amendments to the Republic’s Greek law bonds are accepted, the sum of the face amount of those bonds that will be exchanged and of the other bonds subject to the invitations for which the Republic has received tenders for exchange and consents to the proposed amendments will total approximately €197 billion, or 95.7% of the total face amount of the bonds subject to the invitations.

The Republic has decided to extend the invitation period in respect of each series of its bonds issued under laws other than Greek law and of bonds issued by state enterprises and guaranteed by the Republic until 9:00 p.m. (C.E.T.) on 23 March 2012, to allow holders of those bonds who have not yet tendered them for exchange or submitted consents to do so, and has deferred the settlement date for the exchange only securities listed in its exchange offer only invitation of 24 February 2012 until11 April 2012. Accordingly, the period for submission of participation instructions pursuant to the invitations with respect to the bonds identified as Foreign Law Republic Titles, Foreign Law Guaranteed Titles, Republic Titles, Guaranteed Titles, Guaranteed Titles in Physical Form and Swiss Bonds in the relevant invitation memorandum has been extended until 23 March 2012 at 9:00 p.m. (C.E.T) (which will become the “Expiration Deadline” for purposes of such invitations). However, holders of such bonds will not have the right to revoke any participation instructions previously submitted, unless otherwise permitted pursuant to the relevant invitation.

In addition, Minister Venizelos confirmed that the Republic intends to issue an invitation to the holders of Greek law governed bonds issued by state enterprises and guaranteed by the Republic, including bonds that have been tendered in the exchange offer but have not been accepted by the Republic, soliciting consents to amend these bonds as contemplated by the Greek Bondholder Act in a manner similar to the amendments proposed for the Republic’s bonds governed by Greek law.

Minister Venizelos stated «On behalf of the Republic, I wish to express my appreciation to all of our creditors who have supported our ambitious program of reform and adjustment and who have shared the sacrifices of the Greek people in this historic endeavour. With the support of our official sector and private creditors, Greece will continue implementing the measures needed to achieve the fiscal adjustments and structural reforms to which it has committed, and that will return Greece to a path of sustainable growth. Our invitations to offer to exchange, and submit consents with respect to, foreign law governed and guaranteed bonds will remain open until 23 March 2012, after which there will be no further opportunity for creditors holding those instruments to benefit from the package of EFSF notes, co-financing and GDP linked securities which form an important and integral part of our invitations.» (Further Reading on Finance Ministry website)

PS With the successful PSI, the immediate bankruptcy of Greece has been averted. Greece is saved, Greeks went broke.