New bond rate set for 3.6-3.7 pct

Athens and its private creditors confirmed on Wednesday that a deal on the private sector involvement plan (PSI+) in the Greek debt haircut is likely to be reached in the coming days, with Kathimerini understanding that the average rate of the new bonds will stand at 3.6-3.7 percent.

The Institute of International Finance (IIF), which represents most private creditors in the negotiations, said of constructive talks continuing with the Greek government: ?We hope that the various elements of the Greek package will come together in the days ahead,? IIF spokesman Frank Vogl stated on Wednesday.

Private creditors are said to be setting as a condition for the completion of talks an agreement between Athens and its official creditors, the eurozone and the International Monetary Fund, over the second bailout package for the country.

Greek government spokesman Pantelis Kapsis also said on Wednesday that the PSI deal would be sealed in the next few days, while a more optimistic source from the Finance Ministry said that an agreement was ?just hours away.?

Sources told Kathimerini that negotiations are all but complete, with an agreement on a average coupon between 3.6 and 3.7 percent and the banks? losses at more than 70 percent in net present value. All that is left is some legal and technical details that have to be fine-tuned, the sources said.

One of the last issues pending is the growth clause, as the interest rate of the new bonds will increase by a previously agreed rate, ranging between 0.3 and 0.5 percent, should the growth target for the Greek economy is achieved.

Meanwhile, pressure is growing on the European Central Bank to participate in the haircut, although it is increasingly likely that Frankfurt will avoid speaking on the issue before the deal between Greece and its private creditors is sealed.

?Politicians will bang their heads against the wall trying to get the ECB to be involved at this stage,? Carsten Brzeski, senior economist at ING in Brussels told Bloomberg on Wednesday.

?The ECB will stay out of this as long as it can. While they won?t take a haircut, not booking profits would be a realistic option.?