The “OTHER” Greek debt: It Gets Worse

Image: M - Pics / FreeDigitalPhotos.net *

“One moment please” as I introduce you to the 800 pound Greek Gorilla that is about to enter the room. Allow me to now present to you the “OTHER” Greek debt that is outstanding and will have to be accounted for as the country defaults. Detailed below are some of the “OTHER” sovereign obligations of the Greek government which have now been submitted to the ISDA and I list some of them below. You will note that there are bank bonds, Hellenic Railway bonds, Urban Transportation bonds et al that are guaranteed by Greece. You will also note that there are bonds tied to Inflation, Floating Rate Notes, Asset-Backed securities and a whole mélange of other structured products with a Greek sovereign guarantee.  Mark J Grant

The Greek €107 Billion Contingent Liability Gorilla Exposed

by Tyler Durden
ZeroHedge
March 10, 2012

From Mark Grant, as a follow up The Eight Hundred Pound Greek Gorilla Enters The Room

THE 800 POUND GREEK GORILLA (EXPOSED)

When we have been given the data on Greek sovereign debt it appears we have been misled. I have added up now the ISDA debt issuances and I present them to you; all of these issuances are GUARANTEED by the Hellenic Republic; full faith and credit.

GREEK SOVEREIGN GUARANTEED DEBT                                  AMOUNT
The New Economy Development Fund                                  $139,000,000.00
The Hellenic Railway                                                            $2,240,000,000.00
Structured Notes (Not counting Floating Rate Notes)        $20,683,000,000.00
Athens Urban    Transportation                                                $837,000,000.00
Greek Bank Guaranteed Debt                                             $83,314,000,000.00
TOTAL GREEK GUARANTEED. DEBT                           $107,213,000,000.00

Here is $107 billion of OTHER debt; guaranteed debt that does not appear to be included anywhere in the official Greek sovereign debt figures. Contingent liabilities that are not counted any longer perhaps as the accepted manner of doing business now in Europe. Most of these issuances are governed under British law with “Default” clauses and “Negative Covenant” clauses. Greece defaults on €105 billion Euros and adds new debt, the IMF/EU loans, of 130 billion Euros and we are told that Greece is better off today than yesterday. What drivel! With the addition of the new IMF/EU loans of $172 billion and the revelation of the guaranteed debt at $107 billion Greece now has $279 billion of new and hidden debts.

All of the meandering, all of the charades, all of the red nail polish applied will, in the end I forecast, not be able to hide the reality that the barking dog is a greasy Pig.

A Dose of Reality:
  1. If Greece borrows money from the IMF/EU which means that they have more debt now than they did before they defaulted then they are worse off and not better off as they have a larger debt.
  2. If Greece has an additional $107 billion in debt that has not been accounted for because it is not in the name of the Hellenic Republic but is guaranteed by the Hellenic Republic then how are they going to pay off this debt?
  3. If the goal of this entire exercise was to reduce Greece’s debt to GDP ratio to 120% then how will a larger debt accomplish this as it is fiscally impossible.
  4. If the “real REAL goal” was to pay off the European banks so they wouldn’t default then Europe has accomplished this goal but at a terrible cost to Greece and to the Greek people.

Source: http://www.zerohedge.com/search/apachesolr_search/The Greek €107 Billion Contingent Liability Gorilla Expo

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