Investors feel the heat before Greek deadline

Investors feel the heat before Greek deadline

Investors feel the heat before Greek deadline

Two traders confer on the floor of the New York Stock Exchange. Worries over whether Greece can entice enough private creditors to participate in a bond swap deal tomorrow weighed on markets starting from the first day of the week. AP photo

A disorderly default in Greece would likely necessitate outside support for Spain and Italy to stop the threat of contagion, and could cause more than 1 trillion euros of damage to the eurozone, a group of bondholders warned.

“There are some very important and damaging ramifications that would result from a disorderly default on Greek government debt,” a document from the Institute of International Finance (IIF) said. “It is difficult to add all these contingent liabilities up with any degree of precision, although it is hard to see how they would not exceed 1 trillion euros.”

The document was obtained by Reuters from a market source. It was dated Feb. 18 and marked “IIF Staff Note: Confidential”.

The IIF wants bondholders to sign up for a bond swap deal by a deadline tomorrow, aimed at saving Greece more than 100 billion euros and putting the country on a more stable footing.

However, Greece has no plans to extend tomorrow’s deadline on its bond swap, Greek officials said yesterday, dismissing market rumors.

“We deny the rumors on extending the deadline for the bond swap,” a finance ministry official told Reuters. He said Finance Minister Evangelos Venizelos’ comments to Reuters on March 5, when he said that there would be no extension of the deadline, remained valid.

Debt agency head Petros Christodoulou also denied that the date was being pushed back. “I confirm that the deadline is March 8,” he told Reuters.

Greece offers Corfu land to raise cash

ATHENS - The Associated Press

Greece’s privatization fund launched yesterday a tender for the exploitation of a large seaside plot on the western resort island of Corfu, part of a massive effort to raise funds through sale of state assets.The Hellenic Republic Asset Development Fund said it is seeking to sell the “right of surface” for the 120-acre, forested property at Kassiopi for up to 100 years.

The tender is part of Greece’s bid to raise 50 billion euros ($66 billion) through an open-ended program of privatizations and concession sales, half of which will involve real estate. The country has committed to raise 19 billion euros ($25 billion) of that sum by 2015.

A statement from the fund invited investors to submit expressions of interest by April 10 in the Corfu property, which is in the northeastern part of the island.