Forex news, euro rate. Preliminary agreement with Greek creditors presupposes 60 percent bond service. Such preliminary decisions have been made in the course of negotiations between Greek government and private creditors.
The final agreement on exchanging the existing bonds for the new ones is supposed to be signed next week, as claimed by Greek official, participant of the negotiations. Representatives of Greek coalition currently support the process of negotiations in Greece.
Signing an agreement on reducing debt to private investors is the obligation set to Greece in order to receive the second financial aid package of about 130 bln. euro from International Monetary Fund. According to preliminary agreement, investors will exchange their bonds, the nominal value of which is € 206 bln., into new ones. The total sum, including interest, will amount to 60 percent of the main debt.
Nominal value of new bonds is going to be lower than of existing ones, but their maturity will be much longer. Their average interest rate in the form of coupons will amount to about four percent. Major elements of the agreement follow recommendations of Finance Ministers of euro zone, who have refused the final agreement at the beginning of the week due to extreme interest of creditors.
What was market reaction? According to analytics, at the beginning of European trading session euro future was traded around the point of 1.3150. Judging from the increasing volume, with the drop in price sellers prevail at the market. Movement towards 1.3100 is likely when the rate is set below the point of 1.3150.
