The Daily Update - Greece - Debt Relief

Earlier this week the EU announced it was holding back the next phase of Greece’s debt relief as the government had so far failed to fully implement reforms that it had promised during the huge bailout that ended in August last year. As part of the debt relief scheme, Greece was due to receive approximately  EUR1bn, however, according to the EU, the Greek government has so far not completed new housing insolvency rules for those threatened families with foreclosure on their homes. Pierre Moscovici, the EU Economics Affairs Commissioner said ‘It's too early to decide formally on the disbursement today’ adding ‘The signal given to the markets is decisive, the message of today's Eurogroup will be and must be positive’. The EU appears keen to downplay the announcement somewhat, not wanting to open up old wounds of the Eurozone debt crisis.

Under the debt relief scheme agreed with the EU last year, Greece was to receive profits that Eurozone central banks have made on their Greek bond portfolios plus the revenue made from waiving the step up margin on some Eurozone loans. However, the money can only be granted if Greece delivers on all its promised reforms with no backtracking. According to the EU, so far the Mediterranean country has completed 13 out of the 16 promised reforms. ‘If all reform commitments are met, the Euro group will in April consider the implementation of further debt relief measures’ Mario Centeno, the head of Eurozone finance ministers, told a news conference, adding ‘There are still a couple of points where details need to be fleshed out. The main outstanding issue is a potential new scheme for the protection of primary residences’.

This news comes only days after Greece’s first 10-year bond issue for nearly 10 years. The EUR2.5bn issue yield was set at 3.9% with a 3.875% coupon, with the total book size of nearly EUR12bn. Although this was the first Greek 10-year debt for a while, it did raise EUR2.5bn in 5-year debt in January and aims to raise EUR7bn in total this year. Greece had the confidence to dip its toe in the debt markets after Moody’s raised its sovereign credit rating by 2 notches at the beginning of March. Moody’s upgraded Greece from B3 to B1 (still 4 notches below investment grade) with a stable outlook, noting ‘The ongoing reform effort is slowly starting to bear fruit in the economy’ adding ‘While progress has been halting at times, with targets delayed or missed, the reform momentum appears to be increasingly entrenched, with good prospects for further progress and low risk of reversal’.

Please read this important information before proceeding. It contains legal and regulatory notices relevant to the information on this site.

This website provides information about Stratton Street Capital LLP ("Stratton Street"). Stratton Street is authorised and regulated by the UK's Financial Conduct Authority. The content of this website has been prepared by Stratton Street from its records and is believed to be accurate but we do not accept any liability or responsibility in respect of the information of any views expressed herein. The information, material and content provided in the pages of this website may be changed at any time by us. Information on this website may be out of date and may not be updated or removed.

The website is provided for the main purpose of providing generic information on Stratton Street and on our investment philosophy for the use of financial professionals in the United Kingdom that qualify as Professional Clients or Eligible Counterparties under the rules of the United Kingdom Financial Conduct Authority (the "FCA"). The information in this website is not intended for the use of and should not be relied on by any person who would qualify as a Retail Client. Products and services referred to on this website are offered only at times when, and in jurisdictions where, they may be lawfully offered. The information on this website is not directed to any person in the United States. The provision of the information on this website does not constitute an offer to purchase securities to any person in the United States (other than a professional fiduciary acting for the account of a non-U.S person) or to any U.S. person as such term is defined under the Securities Act of 1933, as amended.

The website is not intended to offer investors the opportunity to invest in any Alternative Investment Fund ("AIF") product. The AIFs managed by Stratton Street are not being marketed in the European Economic Area ("EEA") and any eligible potential investor from the EEA who wishes to obtain information on the AIFs will only be provided with materials upon receipt by Stratton Street of an appropriate reverse solicitation request in accordance with the requirements of the EU Alternative Investment Fund Managers Directive ("AIFMD") and national law in their home jurisdiction. By proceeding you confirm that you are not accessing this website in the context of a potential investment by an EEA investor in the AIFs managed by Stratton Street and that you have read, understood and agree to these terms.

No information contained in this website should be deemed to constitute the provision of financial, investment or other professional advice in any way. The website should not be relied upon as including sufficient information to support any investment decision. If you are in doubt as to the appropriate course of action we recommend that you consult your own independent financial adviser, stockbroker, solicitor, accountant or other professional adviser. Past performance is not necessarily a guide to the future. The value of investments and the income from them may go down as well as up. An application for any investment or service referred to on this site may only be made on the basis of the offer document, key features, prospectus or other applicable terms relating to the specific investment or service.

Where we provide hypertext links to other locations on the Internet, we do so for information purposes only. We are not responsible for the content of any other websites or pages linked to or linking to this website. We have not verified the content of any such websites. Such websites may contain products and services that are not authorised in your jurisdiction. Following links to any other websites or pages shall be at your own risk and we shall not be responsible or liable for any damages or in other way in connection with linking.

By using this site, you should be aware that we may disclose any information that we hold about you to any regulatory authority to which we are subject, or to any person legally empowered to require such information.

This website uses cookies to improve user experience, by clicking the "I Accept" button below means you consent to the use of cookies on our website.