Bloomberg says that NBG rallied today due to relief that it (and other Greek banks) will not be nationalized. http://www.bloomberg.com/news/2012-...-recapitalization-agreement-athens-mover.html By "nationalized" I think they mean management control of the banks, in addition to holding equity of the banks. From my searches today it appears that recapitalization of the Greek banks will be "through common shares with restricted voting rights, a banking source told Reuters on Saturday." http://www.reuters.com/article/2012/02/04/greece-banks-idUSL5E8D40KG20120204 This seems to match the hints given by the Prime Minister http://www.ekathimerini.com/4dcgi/_w_articles_wsite1_1_06/02/2012_426204 According to the prime ministerâs statement, the leaders concurred on four points: 4) The recapitalization of banks through a combination of measures that safeguard public interest and ensure the banksâ managerial autonomy. Reading between the lines, I assume that: "Safeguard public interest" means "government gets substantial equity stake" and "ensure the banksâ managerial autonomy" means "we are going after financial control but not management control". I'm short NBG, and looking to add when details of the recapitalization is formally published. Any thoughts?
http://www.reuters.com/article/2012/02/06/us-greece-bailout-idUSTRE8151TW20120206 ATHENS | Mon Feb 6, 2012 2:14pm EST Greek banks, which hold many Greek government bonds, will require 40 billion euros to replenish their capital after a debt swap plan that will hurt private creditors, Finance Minister Evangelos Venizelos has said. Venizelos wanted the state to bail out the banks by issuing common shares, to make sure that taxpayers will be properly compensated when bank shares recover. Fearing this might lead to nationalization, the troika of EU, IMF and European Central Bank inspectors have pushed for alternative ways to finance them, such as non-voting shares. A banking source told Reuters on Saturday that Athens had agreed to recapitalize the banks through common shares with restricted voting rights, but officials have not confirmed this. Papademos said on Sunday that party leaders had agreed to measures that secure the public interest but also the banks' business autonomy, without giving details.
"Greek Bank Aid Will Be Mostly in Common Shares, Imerisia Reports" http://www.bloomberg.com/news/2012-...mostly-in-common-shares-imerisia-reports.html Seventy percent of a government recapitalization of Greek banks will take the form of common shares carrying no voting rights for three to five years, Imerisia reported, without citing anyone. The remaining 30 percent of government aid will comprise common shares with voting rights, preferred shares and convertible securities, the Athens-based newspaper said.
Draft bailout document is available. "Memorandum of Economic and Financial Policies, February 8" http://www.scribd.com/doc/81046399/Memorandum-of-Economic-and-Financial-Policies-February-8 also at http://www.capital.gr/related_files/mnimonio2.pdf (from https://twitter.com/EfiEfthimiou/status/167536497795399680) *** Bank recap discussion starts on page 12, under headings 16, 17 and 18.
Updating bailout document "GreeceâMemorandum of Economic and Financial Policies, 9 Feb 2012" http://www.scribd.com/doc/81232305/Greece—Memorandum-of-Economic-and-Financial-Policies-9-Feb-2012 via https://twitter.com/AthensNewsEU/status/168101025423687680
There are two different bailout documents The first one, as mentioned above: "GreeceâMemorandum of Economic and Financial Policies, 9 Feb 2012" (31 pages) http://www.scribd.com/doc/81232305/Greece—Memorandum-of-Economic-and-Financial-Policies-9-Feb-2012 via https://twitter.com/AthensNewsEU/status/168101025423687680 and then also "GreeceâMemorandum of Understanding on Specific Economic Policy Conditionality, 9 Feb 2012" (51 pages) http://www.scribd.com/doc/81233785/...fic-Economic-Policy-Conditionality-9-Feb-2012 Both available via http://www.athensnews.gr/portal/11/53222
"Greek Banks May Need Extra 40 Billion Euros, Kathimerini Says" http://www.bloomberg.com/news/2012-...-extra-40-billion-euros-kathimerini-says.html Greek banks will need to raise around 40 billion euros ($53 billion) in additional capital to cover losses from a Greek debt swap plan, following a review of loan portfolios by Blackrock Solutions, Kathimerini said, citing Bank of Greece estimates. Officials from Greeceâs largest banks say the amount needed in extra capital wonât be more than 30 billion euros, the Athens-based newspaper reported today, without saying how it got that information. Greek lenders must submit capital raising plans by the end of April and will have until the end of September to implement them; they will first have to be approved by both the Bank of Greece, the European Union, the European Central Bank and the International Monetary Fund, Kathimerini said.
Bank of Greece Will Issue Two Reports on Lenders, Imerisia Says http://www.bloomberg.com/news/2012-...sue-two-reports-on-lenders-imerisia-says.html The Bank of Greece will release by the end of this month its report on how much additional capital Greek banks need to cover losses from a debt-swap plan, following a review of their loan portfolios by Blackrock Solutions, Imerisia reported. The central bank will issue in March another report that will separate viable from non-viable banks, in cooperation with the International Monetary Fund, the European Commission and the European Central Bank, the Athens-based newspaper reported, without saying how it got the information. Non-viable lenders may be split into ââ¬Ågoodââ¬Â and ââ¬Åbadââ¬Â banks, or the good assets of non-viable lenders may be sold to viable banks, Imerisia said.
"Greek Banks Will Need to Raise 10% of New Capital: Kathimerini" http://www.bloomberg.com/news/2012-...d-to-raise-10-of-new-capital-kathimerini.html Greece will ask the countryâs banks to raise about 10 percent of their additional capital requirements, needed to cover losses from a Greek debt swap, from either old or new shareholders, Kathimerini reported {snip} the Athens-based newspaper said today in its online version. If the 10 percent level is reached, the remaining capital will be provided via the issuance of common shares to the state, the newspaper said.
UPDATE 1-Greece sets bank recap via common shrs with restrictions http://www.reuters.com/article/2012/02/26/greece-swap-idUSL5E8DQ1WH20120226 Sun Feb 26, 2012 2:55pm EST Feb 26 (Reuters) - Greece plans to recapitalize its struggling banks after a bond swap largely through common shares with restricted voting rights and convertible bonds, according to a draft law submitted to parliament over the weekend. The banks are expected to require recapitalisation because of impaired loans and losses from a bond swap that Greece launched on Friday to ease its debt burden . About 50 billion euros ($67.31 billion) have been set aside to recapitalise through Greek banks after the bond exchange. According to the draft law expected to be voted by parliament on Tuesday, the banks will be recapitalized through rights issues which will largely be covered by the Greek bailout fund, the Hellenic Financial Stability Fund. "The voting rights of the new shares will be limited to strategic issues ... like mergers and asset sales," said the draft law. Private investors were worried that banks would fall under state control if they were recapitalised via common voting shares, but the inclusion of restricted voting rights signals that the banks would remain privately-run. Greek Finance Minister Evagelos Venizelos also confirmed last week that Athens did not plan to nationalize its banks. The HFSF will give incentives to private investors to cover at least 10 percent of the rights issue, in which case they would be entitled to buy shares of the bailout fund at a ratio based in their participation in the capital increase. Each bank that seeks funding from the HFSF will have to present a three-year restructuring plan to the fund and the Bank of Greece, the draft law said. The law also said that the Greek government would appoint managers for the HFSF alongwith the EU. The European Commission and the European Central Bank will each have one non-voting representative on its board. The bailout fund can maintain its stakes in the banks for up to five years, the law said. The recapitalisation of the banks will take place after the bond swap concludes in mid-March. Earlier, Greece set a March 8 deadline for investors to participate in the bond swap aimed at cutting its debt burden by about 100 billion euros, according to a document outlining the offer. The debt-laden country formally launched the bond swap offer to private holders of its bonds on Friday, setting in motion the largest-ever sovereign debt restructuring in the hope of getting its finances back on track. In the document, Greece said the March 8 deadline could be extended if needed. Athens in the past has said it wants to conclude the transaction by March 12. The swap is part of a second, 130 billion euro ($175.02 billion) rescue package to claw Greece back from the brink of a default that had threatened to send shockwaves through the financial system and punish other weak euro zone members.