20 Feb 2015
Brinkmanship, yes, but where is the brink? – BBH
FXStreet (Barcelona) - The Brown Brothers Harriman Team explains that the key is not when the program ends, but when Greece has to service its debt, noting that the brink might not be February 28th but few days into March.
Key Quotes
“Acknowledging the brinkmanship game being played out, investors seem to think the brink is the end of the month when the two-month extension to the aid program expires. However, this may not be the true brink.”
“The key may not be when the program ends, but when Greece has to service its debt. The first payment to the IMF is on March 5 (~300 mln euros). That same day, Greece has about 1.4 bln euros in T-bills maturing that need to be rolled over. This could prove difficult as foreign investors are not keen and Greek banks’ interest is curtailed by falling deposits and limits on using ELA funds to finance the government."
“The point is that February 28 might not be the hard and fast deadline of all deadlines that it is made out to be. The brink may be a few days into the new month.”
Key Quotes
“Acknowledging the brinkmanship game being played out, investors seem to think the brink is the end of the month when the two-month extension to the aid program expires. However, this may not be the true brink.”
“The key may not be when the program ends, but when Greece has to service its debt. The first payment to the IMF is on March 5 (~300 mln euros). That same day, Greece has about 1.4 bln euros in T-bills maturing that need to be rolled over. This could prove difficult as foreign investors are not keen and Greek banks’ interest is curtailed by falling deposits and limits on using ELA funds to finance the government."
“The point is that February 28 might not be the hard and fast deadline of all deadlines that it is made out to be. The brink may be a few days into the new month.”