Friday, April 22, 2011

Greece probes market talk of debt restructuring

Financial Times
April 21, 2011

Greece has launched an investigation into widespread market speculation that the country could seek a debt restructuring over the coming holiday weekend.

Government and court officials in Athens said on Thursday that the prosecutor had launched an investigation prompted by an e-mail sent by a employee of Citigroup, the US bank.

The Citi e-mail, which has been seen by the Financial Times and carries a timestamp of 13.42 on Wednesday, read: “Over the last 20min, there seems to be some increased noise over [Greek] debt restructuring as early as this Easter weekend. Spreads are moving wider now with 2-year spread +100 from +35 mid-day, while [Greek] banks are at -4%, i6% vs +2% in the morning.

“The last few days the talks over [Greek] restructuring/rescheduling have intensified, despite the ongoing denials by [Greek] and foreign officials.

“If a credit event takes place it is crucial to see what the terms would be as a haircut would have a much different outcome vs an extension of maturities.”

Citigroup said on Thursday: “We are co-operating with the authorities and do not consider there to have been any wrongdoing by Citi or its employees.”


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