The government is considering a tax reduction for investors buying the bonds that will be issued in the context of the Hercules plan of securitizing nonperforming loans, Deputy Finance Minister Giorgos Zavvos has told Bloomberg.
Zavvos explained that the government’s objective is to facilitate the participation of investors by making it cheaper to enter into the scheme, aimed at covering loans worth 30 billion euros.
Crucially, the state collateral of 9 billion euros for the senior notes to be issued will only apply if at least half of the other two categories of bonds (mezzanine and junior notes) to be issued are successfully sold to private investors.
Following contacts in Washington, Zavvos said that some the world’s biggest investment groups – such as Deutsche Bank, Credit Suisse, JPMorgan and HSBC – have expressed their intention to participate in Hercules, whose activation could contribute to Greece being granted a credit upgrade.
The government’s next step, Zavvos added, will be to improve bankruptcy legislation and regulations for the secondary market for bad loans, so as to ensure that management companies operate in a more efficient framework.