Various Scenarios Involving Greek Default [Chart]

Glad I did not invest in this mess:

And comments from BNP:

“We expect the announcement of the PSI+ terms in the near future and, according to all indications, the retroactive insertion of collective action clauses (CACs) into Greek-law bond (GGBs) in the coming days. Then, the IMF will use these inputs to design a second bailout programme and determine the size of it. The Fund will need to assume a certain participation rate in the PSI+ in order to determine Greece’s funding needs for the coming years. At the same time, the Greek coalition government headed by Prime Minister Lucas Papademos will be asked to pass new austerity measures, as the conditionality of the loans is expected to be very harsh in the second programme.

After or in parallel with these political developments, a 2-3 week window for the PSI+ bond exchange will open, during which investors will have to decide whether they will participate or not. Once this is completed, the IMF and the Greek government will have to decide if the participation rate is satisfactory.

If it is not, we may see the use of CACs to achieve 100% participation. Bear in mind that if the Greek government chooses a very low activation threshold for the CACs (for example, 50%) and threatens to use them in a punitive manner if participation does not reach a very high level, this could significantly reduce the number of holdouts.

Once all these steps have been taken, the second bailout programme will be signed by all sides and the first tranche of funds will be released”

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