Hedge Fund Threatens to Sue Over Greek Debt Losses

Madrid-based Vega Asset Management has resigned from a group of private creditors in finalizing the restructuring of Greek debt as agreed to in the October EU Summit.  Vega has threatened legal action against officials negotiating the country’s debt restructuring if losses are too deep:

Jesús Sáa Requejo, a senior Vega executive, wrote in the letter on December 7. “Vega needs to start considering all available legal options to refuse and challenge any exchange that implies a NPV loss of more than 50 per cent.”

                         Photo: StayInSussex.com 

Provided some kind of bond swap eventually is agreed to by private lenders, it should be noted that the new bonds would be covered not by Greek but British law. The terms of the new bonds are still being discussed: Greece wants 30-year bonds with a 4% coupon; the banks want 20-year bonds paying 8%.

Meanwhile, the Greek 10-year bond closed today at a 35.78% yield.