PARIS — Bondholders negotiating a debt swap with Greece may get a sweetener tied to a revival in economic growth that would ease the impact of accepting a lower interest rate on the new bonds, people with knowledge of the talks said.
In discussions late last week in Athens, creditors lowered their demands for an average coupon on the new 30-year securities they would receive to as little as 3.6 percent from 4.25 percent after European officials demanded they take steeper losses, people familiar with the matter said at the time.
While the lower coupon would lead to an estimated loss of 70 percent or more for investors, adding a so-called gross domestic product warrant — which would pay bondholders more if the Greek economy rebounds — would trim the loss in net present value terms by an estimated 0.5 to 3 percentage points, said two people, who declined to be identified because the talks are confidential.
Greece and private creditors are near a tentative accord that would in principle include the warrants, the people said. As an additional inducement for creditors, the debt would be governed under British rather than Greek law, providing greater bondholder protections, people with knowledge of the matter said. Questions over whether Greece can fulfill conditions for a second aid package from the European Union and International Monetary Fund have put the accord on hold for now, they said.
The Greek government is “one step from closing” a debt-swap deal with its private bondholders, Finance Minister Evangelos Venizelos told reporters in Athens on Tuesday.
