(Adds detail on Portuguese banks.)
THE EVENT: A crucial deadline is approaching as Greece seeks to
get commitments by its bondholders to agree to a debt-restructuring
plan that will involve big losses on their holdings.
The debt restructuring involves debt worth EUR206 billion in the
hands of the private sector, although the current offer is extended
to holders of EUR177 billion of bonds under Greek law. Greece needs
to secure at least 90% of that for the bond exchange to proceed on
a voluntary basis.
If less than 90% of holders participate, Greece has the option
of invoking collective action clauses to force remaining holders to
accept the deal. But for that to happen, at least half of the bond
holders must participate in a related vote and at least two-thirds
of them should vote in favor of the bond-swap terms.
Greece is optimistic that it can get a 75%-80% participation
rate in the bond swap, people with direct knowledge of the matter
have said, and many banks that had been saying they were still
considering the matter confirmed Wednesday that they would
participate.
THE DEADLINE: Bondholders have until 2000 GMT Thursday to accept
the deal, which will result in the exchange of existing bonds for
new ones with a face value slashed by 53.5%.
THE IMPORTANCE: The bond swap is an integral part of a second,
EUR130 billion bailout loan for Greece that will keep it from
becoming the first euro-zone member to default when a EUR14.5
billion bond redemption comes up on MarMarfin Popular Bank PCL
(CPB.CP) ch 20.
Here are highlights of bank comments from financial companies
ahead of the deadline. Banks and insurers in France, Germany and
Greece have the majority of the holdings:
STEERING COMMITTEE:
*Institutions representing almost 40% of outstanding Greek bonds
held by private lenders have agreed to participate in the voluntary
swap, according to the Institute of International Finance. The
banks, insurance firms and funds are participants in the steering
committee that negotiated the terms of the debt restructuring under
the IIF, which represents some 450 financial institutions.
Those on the committee and vowing to participate: Ageas NV
(AGS.BT), Allianz SE (ALV.XE), Alpha Bank AE (ALPHA.AT), AXA SA
(CS.FR), Banque Postale, BNP Paribas SA (BNP.FR), CNP Assurances
(CNP.FR), Commerzbank AG (CBK.XE), Credit Agricole SA (ACA.FR),
Credit Foncier, DekaBank, Deutsche Bank AG (DB), Dexia SA
(DEXB.BT), Emporiki Bank of Greece SA (TEMP.AT), Eurobank EFG
(BEUR.UR), Assicurazioni Generali SpA (G.MI), Greylock Capital
Management, HSBC Holding PLC (HBC), ING Bank, Intesa Sanpaolo SpA
(ISP.MI), KBC Group NV (KBC.BT), Marfin Popular Bank PCL (CPB.CP),
Metlife, National Bank of Greece SA (ETE.AT) Piraeus Bank, Royal
Bank of Scotland PLC (RBS), Societe Generale SA (GLE.FR) and
UniCredit SpA (UCG.MI).
Landesbank Baden-Wurttemberg of Germany was the only steering
committee member not mentioned in the original IIF participation
statement. But it said Wednesday that it would particpate. LBBW,
according to its disclosures from September 2011, held EUR628
million in Greek government bonds.
REACTIONS:
*Jean Lemierre, a senior adviser with French bank BNP Paribas SA
(BNP.FR) and a key negotiator in the Greek bond deal, said it isn't
possible to predict the outcome of Thursday's Greek bond swap.
"Each private bondholder will make his own decision according to
the terms of the exchange. But the offer's success is in
everybody's best interest," he told French daily Le Monde in an
interview to be published Thursday. He said that if Greece had to
use collective-action clauses to force bondholders to participate
in the bond exchange, the European Union and Greece could review
some of the deal's parameters, which could degrade the offer to
private bondholders.
*European Economic Affairs Commissioner Olli Rehn said he
expected the Greek bond swap to take place "without a glitch," in
an interview published Wednesday in French daily Le Figaro.
ADDITIONAL BANK/INSURER COMMENTS:
GERMANY:
*Allianz SE (ALV.XE) said Wednesday it will take part in the
swap, which it said was economically viable for the insurance
company. It said it held bonds with a nominal value of about EUR1.3
billion at the end of 2011.
*Commerzbank, which was on the IIF participation list Monday,
holds about EUR3 billion in Greek sovereign debt in nominal
terms.
*Deutsche Bank, which was on the IIF participation list Monday,
holds about EUR1.5 billion in Greek government debt in nominal
terms.
*DZ Bank said Wednesday the bank will participate, along with
all other holders of Greek sovereign debt within the cooperative
bank sector. The sector includes, among others, asset manager Union
Investment and insurer R+V.
*Helaba and WGZ-Bank, along with DZ-Bank, together hold EUR1.5
billion in Greek debt nominal value at the end of 2011. All three
banks confirmed they will take part in the debt swap.
*Hypo RE's FMS Wertmanagement holds some EUR7.2 billion in Greek
sovereign debt, EUR1.6 billion in loans, bonds of Greek companies.
FMS hasn't officially decided yet whether to take part. However, it
is expected to do so, two people familiar with the matter told Dow
Jones Newswires.
*KfW Bankengruppe, the German government's development bank,
will participate, Chief Executive Ulrich Schroeder told reporters,
adding that sentiment about private-sector participation in the
swap has "dramatically changed" in the past few days. It has about
EUR250 million in nominal value.
*Munich Re AG (MUV2.XE) will participate, a spokeswoman said
Wednesday. Munich Re held Greek sovereign debt with a nominal value
of EUR1.59 billion at the end of September.
GREECE:
*Alpha Bank, Eurobank, Piraeus Bank and National Bank of Greece
are all on the steering committe and Monday vowed to
participate.
*On Wednesday, members of the Private Creditor-Investor
Committee for Greece, who hold 39.3% of the eligible bonds, or
EUR81 billion, said they intend to participate in the bond
exchange.
The institutions that comprise the PCIC are Emporiki Bank
(TEMP.AT) and Marfin Popular Bank (CPB.CP), along with Alpha Bank,
Eurobank, Piraeus Bank and NBG.
ITALY:
*UniCredit SpA (UCG.MI): Italy's second-largest bank by market
value said it will participate in the bond swap. As of the end of
the third quarter of 2011, the nominal value of its holdings was
EUR541 million.
NORDICS:
*Jyske Bank A/S (JYSK.KO) is the largest holder of Greek
sovereign debt in the Nordic region, with bonds with a nominal
value of around EUR68 million. It hasn't stated its intentions
ahead of Thursday's restructuring agreement. Other Nordic banks
hold even smaller levels, or no Greek debt at all, as the region's
banks have so far managed to limit their exposure to Southern
Europe's troubled economies.
PORTUGAL:
*Banco BPI SA (BPI.LB). Will participate. As of Oct. 31, the
nominal value of its Greek holdings was EUR480 million.
*Banco Comercial Portugues SA (BCP.LB), with nominal holdings of
about EUR719 million, said it will participate.
*State-owned Caixa Geral de Depositos, with EUR133 million
exposure, will participate.
UK:
*Royal Bank of Scotland Group PLC (RBS) was on the original IIF
participation list. The bank said its nominal holdings were GBP1.6
billion.
*Standard Chartered PLC (STAN.LN) said it had no exposure to
Greek sovereign debt.
*Lloyds Banking Group PLC (LYG) said it has no exposure to Greek
sovereign debt.
*Barclays PLC (BCS) declined to comment on the PSI and simply
said its exposure to Greek sovereign debt was "minimal."