This article reports that the ECB is swapping its Greek bonds for new ones to ensure it isn't forced to take losses in a debt restructuring.
The Frankfurt-based ECB is exchanging its Greek bonds for bonds of an identical structure and nominal value, the only difference being that they would be exempt from so-called collective action clauses. The bonds supposedly have a face value of about €50 billion.
The move may be completed by Monday. That could pave the way for a private-sector bond swap that aims to slice about €100 billion off Greece’s debt as the embattled nation struggles to stave off default. Euro area finance ministers convene in Brussels on February 20 to discuss a second bailout for Greece that includes a debt-swap agreement.
An exemption from collective action clauses, or CACs, would mean the ECB would not have to participate should the Greek government impose involuntary losses on bondholders. That may occur if not enough private creditors agree to a voluntary swap.
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© Bloomberg
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