Thursday, July 21, 2011

Greece Financing Offer: Statement by the IIF Board of Directors

Institute for International Finance
July 21, 2011

The IIF Board announced today the attached IIF Financing Offer for Greece. The program offers a menu of new instruments to investors in order to mobilize voluntary participation of investors with a target participation rate of 90%. This will provide financing to Greece of €54 billion from mid-2011 to mid-2014 and a total of €135 billion from mid-2011 to end-2020.

Greece’s debt profile will be improved substantially with the exchange and roll-over program extending average maturities of privately held claims from 6 to 11 years. The stock of debt will be reduced by €13.5 billion through the bond exchange program and potentially by €24.3 billion (or 10.6% of current GDP) including through a debt buyback program (estimated to be €20 billion). The debt exchanges, lending and roll-overs will take place at rates that are broadly comparable to that being extended by the EU (see attached Financing Offer and Term Sheet). The new instruments will have significantly longer maturities up to 30 years.

Dr. Josef Ackermann, Chairman of the Board of the Institute, stated, “We believe that taken together with the intention of the EU to improve the terms of its financial assistance to Greece, the recently strengthened economic reform program of the Greek government and the additional support of the IMF, this offer can contribute substantially to improving the competitiveness of the Greek economy.”

Mr. Charles Dallara, Managing Director of the IIF added, “With this offer, the global investor community is stepping forward in recognition of the unique challenges facing Greece. The removal of financing uncertainties will allow Greece to focus on the key elements of the reform program itself—further fiscal adjustment, revenue enhancement, privatization, and other structural reforms—which can lay the basis for renewed growth.”


Read the IIF Financing Offer (PDF)

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