Greek state aid in bank recap to come via CoCos


Greece will unveil its bank recapitalization framework by Friday aiming to vote it into law by Sunday, a day after the European Central Bank releases results of its health check on the country’s four big banks, a senior banker said on Tuesday.

The country’s bank rescue fund HFSF will plug any part of the capital shortfall that is not covered by private investors via a combination of new shares and contingent convertible bonds (CoCos) that banks will issue.

“The new shares will have full voting rights,” the banker close to the procedure told Reuters, declining to be named.

“The exact mix of CoCos and new shares will be clarified later by a ministerial decree.”