Deutsche, HSBC, BNP advising Greece on bond swap

Deutsche Bank, BNP Paribas and HSBC are advising Greece on its planned voluntary swap of privately-held government bonds for longer maturity paper, a finance ministry official told Reuters on Wednesday.

Greece’s private sector creditors will take a 21 percent loss on their bond holdings as part of a 37 billion euro contribution to a rescue plan for the debt-stricken country, agreed at a euro zone summit last week.

The International Institute of Finance (IIF), a bank lobby group, has estimated a take-up rate of about 90 percent for the voluntary programme, which gives banks, funds and insurers the option to swap Greek debt with new bonds with maturities of up to 30-years.

Officials want to conduct the voluntary bond swap quickly to minimize the period during which Greece is expected to be in partial default by credit rating agencies.

A first working meeting on implementing the swap will take place on Thursday in Athens, with the government expecting the exchange to start in August. [Reuters]