Euro zone grants S$11.2b lifeline to Greece
BRUSSELS — After more than three years on life support from Europe, Greece secured a €6.8 billion (S$11.2 billion) lifeline from the euro zone yesterday. But the country told that it must keep its promises on cutting public sector jobs and other reforms in order to get all the cash.
The deal, which spares Greece defaulting on debt that falls due next month, will see Athens drip-fed support under close watch from its international creditors to drive through unpopular reforms.
http://www.todayonline.com/business/euro...ine-greece
I read that Greece last year bought back some of their debt cheaply around less than 40cts to the dollar then wrote it off. That's how Argentina who defaulted in the 80's became solvent again in the 90's by buying back debt cheaply and writing it off, of course at the expense of bondholders.
So debt that has defaulted actually still has some value because it's cheap to retire for the issuer. And that's what a lot of people did by ploughing into Argentina defaulted debt and holding until today they known as holdouts or Vulture capitalists.
http://online.wsj.com/article/SB10001424...07070.html
(09-07-2013, 10:43 AM)sgd Wrote: [ -> ]I read that Greece last year bought back some of their debt cheaply around less than 40cts to the dollar then wrote it off. That's how Argentina who defaulted in the 80's became solvent again in the 90's by buying back debt cheaply and writing it off, of course at the expense of bondholders.
So debt that has defaulted actually still has some value because it's cheap to retire for the issuer. And that's what a lot of people did by ploughing into Argentina defaulted debt and holding until today they known as holdouts or Vulture capitalists.
http://online.wsj.com/article/SB10001424...07070.html
I recalled there are successful hedge funds specializing in distress debt, and the performance is well above indexes.
Those hedge funds will need holding power to wait 1-2 decades. I read that they know for a country in such distress situation the pain will be unbearable and will inevitably succumb to the temptation to try and buy back their debt cheaply and writing it off often without agreement with it's bondholders, so these holdouts they just waiting for the recovery then start lawsuits against the government for losses.
There are all types of investors in this world.