IFR Comment: For Greece 'O' comes after 'P'

We are nearly there when it comes to the Greek PSI (private sector involvement) and now the focus turns to OSI (official sector involvement).

The Greek press reports that the ECB has already examined all possible scenarios with two standing out as most likely: 1) the ECB and NCB take a reduction similar to the PSI for Greek bonds they hold that are outside the SMP and 2) in addition to the above the ECB/NCB also take a hit on the bonds that are held as a part of the SMP. The first option is believed to lead to a reduction of 5bn while the second a more significant 14bn.

FTD (FT Deutschland) suggests that while there is agreement on the NCPs participating with their holdings, the ECB is against including purchases under SMP in any OSI. While we wait for a deal today or maybe over the weekend, the deal is more likely on Monday when the Eurogroup will hold a special meeting.