Greek bonds issued as part of the biggest ever sovereign debt restructuring signal sellers of default insurance will have to pay about $2.6 billion to holders of credit swaps.
Investors are using new Greek 30-year bonds that are trading at about 23 cents on the euro to calculate the payout, according to Teo Lasarte, a European credit strategist at Bank of America Merrill Lynch in London.
The credit-default swaps will be settled at an auction on March 19 after investors were forced to exchange their Greek debt holdings at a loss. Austria may have to inject 1 billion euros ($1.3 billion) into KA Finanz AG, the so-called bad bank of Kommunalkredit Austria AG, to help cover Greek swap payouts, the nationalized lender said.
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