Negotiators for Greece investors announce tentative deal
(ATHENS, Greece) Greece and its private investors are close to a deal that will significantly reduce the country's debt and pave the way for it to receive a much-needed 130 billion bailout.
Negotiators for the investors announced the tentative agreement Saturday and said it could become final next week. Under the agreement, the investors would take a hit of more than 60 percent on the 206 billion of Greek debt they own.
Here's how it would work: private investors would receive new bonds whose face value is half of the existing bonds. The new bonds would have a longer maturity and pay an average interest rate of slightly less than 4 percent (compared with an estimated 5 percent on the existing bonds). Without the deal, which would reduce Greece's debt load by at least 120 billion, the private investors' bonds would likely become worthless. Many of these investors also hold debt from other eurozone countries, which could also lose value in the event of a Greek default.
Read more: http://www.time.com/time/world/article/0,8599,2105626,00.html#ixzz1ko92OAiV
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Looks like 50% haircut for the investors. I wonder what the Greeks will need to give up.