Greek gov’t issues ministerial act on the use of CoCos
The Greek government on Tuesday issued a ministerial council act on the details of a bank recapitalization plan, envisaging an 8.0 pct interest on bonds and the operation of CoCos (convertible bonds) with which Hellenic Financial Stability Fund will cover additional capital needs of Greek banks.
The ministerial act said that these bonds will carry an annual interest rate of 8.0 pct and that the bonds would be automatically converted into common shares if for any reason the credit institution failed to pay interest in two payment dates (not necessarily successive).
Credit institutions will be free to choose repayment of the bonds, either part or in full, in their initial nominal value, plus interest, in cash. Each bond will have a nominal value of 100,000 euros and an indefinite maturity without any defined repayment date.
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