Gross Private Sector Involvement (PSI) contribution 2011-2020
The gross PSI contribution will be EUR 135 billion via a voluntary exchange of bonds
maturing between 2011 and 2020, assuming a 90% participation rate across four
schemes:
1. A par bond exchange into a 30-year instrument, with principal collateralised
by 30-year zero-coupon AAA-rated bonds and coupons of 4 % (years 1 to
5), 4.5% (years 6 to 10) and 5% (years 11 to 30).
2. A par bond offer involving a rolling over of bonds at maturity into 30-year
instruments, with principal collateralised by 30-year zero-coupon AAA-rated
bonds and coupons of 4 % (years 1 to 5), 4.5% (years 6 to 10) and 5% (years
11 to 30).
3. A discount bond exchange offered at 80% into a 30-year instrument, with
principal collateralised by 30-year zero-coupon AAA-rated bonds and
coupons of 6 % (years 1 to 5), 6.5% (years 6 to 10) and 6.8% (years 11 to
30).
4. A discount bond exchange offered at 80% into a 15-year instrument, with
principal partially collateralised with 80% of losses being covered up to a
maximum of 40% of the notional values of the new instrument and with a
single coupon of 5.9%.
It is assumed that the total exchange will be distributed evenly across the four schemes,
i.e. EUR 33.75 billion in each scheme.
Cost of credit enhancement 2011-2020
The cost of the credit enhancement, i.e. the collateralisation of new bonds after
exchange, will be EUR 42 billion for the period 2011-2020.
PSI net of credit enhancement 2011-2020
The PSI contribution for 2011-2020, taking account of the cost of credit enhancement
for the new bonds after exchange, will be EUR 93 billion (EUR 135 billion minus
EUR 42 billion).
PSI contribution 2011-2014
The gross PSI contribution in the programme period 2011-2014 will be EUR 54 billion,
from the overall total of EUR 135 billion for the period 2011-2020.
Cost of credit enhancement 2011-2014
The cost of credit enhancement for the total exchange must be paid up-front, except in
the case of Scheme No. 2 where the cost of credit enhancement is paid on the maturity
date of the bond to be exchanged. This implies that EUR 35 billion in credit
enhancement will be required during the programme (EUR 16.8 billion for bonds
maturing in the period 2011 to 2014 and EUR 18.4 billion for bonds maturing in the
period 2015 to 2020), with an additional EUR 7 billion falling due for payment outside
of the programme period and so not covered by official financing.
PSI net of credit enhancement 2011-2014
The PSI contribution, taking account of the cost of credit enhancements for the new
bonds after exchange, will be EUR 37 billion (EUR 54 billion minus 16.8 billion)
taking into account the credit enhancement linked to bonds maturing during this period
and EUR 19 billion (EUR 54 billion minus EUR 35 billion).
Debt reduction from PSI
In two of the schemes for PSI, bonds will be exchanged at a discount of 20%, implying
a reduction in the outstanding debt of EUR 13.5 billion, equivalent to 6% of GDP.
Net Present Value (NPV) loss
The four schemes for bond exchange imply a combined NPV loss of 21% for the private
bondholders.
Official contribution from euro area for DBB
The IIF proposal includes a debt buy-back operation which will be partially financed by
the euro-area Member States. The assumed contribution of the Member States is EUR
20 billion.
Debt reduction from DBB
The EUR 20 billion contribution from the euro area Member States to a debt buy-back
operation is assumed to reduce the outstanding debt by EUR 12.6 billion, assuming an
average buy-back price of 61.43%.
Total debt reduction PSI +DBB
Combining the effect of the discounts in the bond exchange and buy-back operations,
the total reduction in outstanding debt will be EUR 26.1 billion (EUR 13.5 billion PSI
and EUR 12.6 billion DBB), which is equivalent to 11.58% of GDP.
Calculating official financing needs
Bringing these various elements together, the total official contribution to financing the
second programme can be calculated as follows:
Baseline: EUR 88 billion:
minus EUR 54 billion: Gross PSI
plus EUR 35 billion: Credit enhancement in programme period
plus EUR 20 billion: Contribution to DBB
plus EUR 20 billion: Recapitalisation of Greek banks
Total: EUR 109 billion
The total of EUR 109 billion in official financing assumes that EUR 28 billion will be
realised in privatisation receipts. This total does not include about EUR 45 billion in
undisbursed funds under the Greek Loan Facility.
Total net PSI contribution including DBB 2011-2014
Combining the net PSI contribution of EUR 19 billion in the programme period with the
PSI of EUR 12.6 billion implied in debt buyback gives a total of EUR 31.6 billion
Total net PSI contribution including DBB 2011-2020
Combining the net PSI contribution of EUR 93 billion in the period 2011-2020 with the
PSI of EUR 12.6 implied in the debt buyback gives a total of EUR 105.6 billion.
(1) This background document has been produced by the services of the European Commission for information purposes only. All figures are based on estimates.
http://ec.europa.eu/economy_finance/articles/financial_operations/pdf/psi_en.pdf
_______________________________
Προσοχή ατην υποσημείωση (1), η οποία μάλιστα μπήκε στο τίτλο
The gross PSI contribution will be EUR 135 billion via a voluntary exchange of bonds
maturing between 2011 and 2020, assuming a 90% participation rate across four
schemes:
1. A par bond exchange into a 30-year instrument, with principal collateralised
by 30-year zero-coupon AAA-rated bonds and coupons of 4 % (years 1 to
5), 4.5% (years 6 to 10) and 5% (years 11 to 30).
2. A par bond offer involving a rolling over of bonds at maturity into 30-year
instruments, with principal collateralised by 30-year zero-coupon AAA-rated
bonds and coupons of 4 % (years 1 to 5), 4.5% (years 6 to 10) and 5% (years
11 to 30).
3. A discount bond exchange offered at 80% into a 30-year instrument, with
principal collateralised by 30-year zero-coupon AAA-rated bonds and
coupons of 6 % (years 1 to 5), 6.5% (years 6 to 10) and 6.8% (years 11 to
30).
4. A discount bond exchange offered at 80% into a 15-year instrument, with
principal partially collateralised with 80% of losses being covered up to a
maximum of 40% of the notional values of the new instrument and with a
single coupon of 5.9%.
It is assumed that the total exchange will be distributed evenly across the four schemes,
i.e. EUR 33.75 billion in each scheme.
Cost of credit enhancement 2011-2020
The cost of the credit enhancement, i.e. the collateralisation of new bonds after
exchange, will be EUR 42 billion for the period 2011-2020.
PSI net of credit enhancement 2011-2020
The PSI contribution for 2011-2020, taking account of the cost of credit enhancement
for the new bonds after exchange, will be EUR 93 billion (EUR 135 billion minus
EUR 42 billion).
PSI contribution 2011-2014
The gross PSI contribution in the programme period 2011-2014 will be EUR 54 billion,
from the overall total of EUR 135 billion for the period 2011-2020.
Cost of credit enhancement 2011-2014
The cost of credit enhancement for the total exchange must be paid up-front, except in
the case of Scheme No. 2 where the cost of credit enhancement is paid on the maturity
date of the bond to be exchanged. This implies that EUR 35 billion in credit
enhancement will be required during the programme (EUR 16.8 billion for bonds
maturing in the period 2011 to 2014 and EUR 18.4 billion for bonds maturing in the
period 2015 to 2020), with an additional EUR 7 billion falling due for payment outside
of the programme period and so not covered by official financing.
PSI net of credit enhancement 2011-2014
The PSI contribution, taking account of the cost of credit enhancements for the new
bonds after exchange, will be EUR 37 billion (EUR 54 billion minus 16.8 billion)
taking into account the credit enhancement linked to bonds maturing during this period
and EUR 19 billion (EUR 54 billion minus EUR 35 billion).
Debt reduction from PSI
In two of the schemes for PSI, bonds will be exchanged at a discount of 20%, implying
a reduction in the outstanding debt of EUR 13.5 billion, equivalent to 6% of GDP.
Net Present Value (NPV) loss
The four schemes for bond exchange imply a combined NPV loss of 21% for the private
bondholders.
Official contribution from euro area for DBB
The IIF proposal includes a debt buy-back operation which will be partially financed by
the euro-area Member States. The assumed contribution of the Member States is EUR
20 billion.
Debt reduction from DBB
The EUR 20 billion contribution from the euro area Member States to a debt buy-back
operation is assumed to reduce the outstanding debt by EUR 12.6 billion, assuming an
average buy-back price of 61.43%.
Total debt reduction PSI +DBB
Combining the effect of the discounts in the bond exchange and buy-back operations,
the total reduction in outstanding debt will be EUR 26.1 billion (EUR 13.5 billion PSI
and EUR 12.6 billion DBB), which is equivalent to 11.58% of GDP.
Calculating official financing needs
Bringing these various elements together, the total official contribution to financing the
second programme can be calculated as follows:
Baseline: EUR 88 billion:
minus EUR 54 billion: Gross PSI
plus EUR 35 billion: Credit enhancement in programme period
plus EUR 20 billion: Contribution to DBB
plus EUR 20 billion: Recapitalisation of Greek banks
Total: EUR 109 billion
The total of EUR 109 billion in official financing assumes that EUR 28 billion will be
realised in privatisation receipts. This total does not include about EUR 45 billion in
undisbursed funds under the Greek Loan Facility.
Total net PSI contribution including DBB 2011-2014
Combining the net PSI contribution of EUR 19 billion in the programme period with the
PSI of EUR 12.6 billion implied in debt buyback gives a total of EUR 31.6 billion
Total net PSI contribution including DBB 2011-2020
Combining the net PSI contribution of EUR 93 billion in the period 2011-2020 with the
PSI of EUR 12.6 implied in the debt buyback gives a total of EUR 105.6 billion.
(1) This background document has been produced by the services of the European Commission for information purposes only. All figures are based on estimates.
http://ec.europa.eu/economy_finance/articles/financial_operations/pdf/psi_en.pdf
_______________________________
Προσοχή ατην υποσημείωση (1), η οποία μάλιστα μπήκε στο τίτλο
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