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Athens News Agency: News in English, 07-06-08

Athens News Agency: News in English Directory - Previous Article - Next Article

From: The Athens News Agency at <http://www.ana.gr/>

CONTENTS

  • [01] Funds accept JP Morgan bond offer

  • [01] Funds accept JP Morgan bond offer

    Four state-run pension funds announced on Friday afternoon that they have accepted a JP Morgan offer to repurchase a structured bond worth 280 million euros, thereby returning invested capital back to their reserves, a development that comes on the heels of a same-day Greek government decision to cover back interest and a 17.00 GMT- deadline by the financial institution.

    Earlier, two top ministers announced that the Greek state will make up the difference on back interest on structured bonds issued by JP Morgan and purchased by state-run pension funds.

    Economy and Finance Minister George Alogoskoufis and Labour and Social Insurances Minister Vassilis Magginas also reiterated the government's position that not a single euro of funds' reserves will be lost in the repurchase deal.

    Both ministers also said that the interest concerns the holding period, in other words, the time during which the bond was in the possession of the funds, noting that the formula for payment of interest was the "stumbling block" in negotiations thus far between the funds and JP Morgan.

    They further said that relevant legislation would need to be passed for this arrangement, thereby allowing payment of interest on the basis of the interest rates linked with deposits of the Bank of Greece's "common capital", which is the capital deposits of commercial banks maintained at the central bank.

    "As it is known, regarding the repurchase of the 280-million-euro bond, a disagreement has surfaced between the funds and the international credit institution with respect to the interest corresponding to the period of holding of the bond by the funds," a joint statement by the two ministers stated.

    ANA-MPA/ EPA file photo.


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