Re­struc­tur­ing.

Kathimerini English - - Business & Finance -

Greece is un­likely to re­struc­ture its debt in the short term be­cause it would be dif­fi­cult to do so with­out trig­ger­ing pay­outs of credit de­fault swaps, ac­cord­ing to Cit­i­group Inc. “It is cer­tainly pos­si­ble to en­vis­age forms of re­struc­tur­ing which fail to trig­ger CDS, but we are doubt­ful that they will be em­ployed in prac­tice,” said Michael Ham­p­den-Turner, a strate­gist at Cit­i­group in Lon­don. “We suspect that Euro­pean and ECB pol­i­cy­mak­ers will duck the hard de­ci­sions.” Po­lit­i­cal lead­ers and Euro­pean Cen­tral Bank of­fi­cials are likely to “mud­dle through” with an­other “state-funded bailout, per­haps this time col­lat­er­al­ized by fu­ture as­set sales,” he said. New steps are needed af­ter last year’s 110-bil­lion-euro ($156 bil­lion) res­cue failed to re­store Greece’s fi­nan­cial health. Euro­pean of­fi­cials are try­ing to avoid trip­ping swaps, with French Fi­nance Min­is­ter Christine La­garde say­ing this week that “any­thing that would con­sti­tute a credit event is for me off the ta­ble.” Spec­u­la­tion is in­creas­ing that a re­struc­tur­ing of Greek bonds may be pos­si­ble with­out meet­ing the In­ter­na­tional Swaps & De­riv­a­tives As­so­ci­a­tion’s def­i­ni­tions of such an event. (Bloomberg)

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