France, banks agree on Greek debt proposal, source says

By REUTERS
June 27, 2011 00:26

PARIS - The French government and banks have agreed on a proposal to make a Greek debt rollover more palatable to creditors, a banking source said on Sunday, confirming a report in Le Figaro newspaper.

Under the plan, creditors would reinvest 70 percent of the proceeds reimbursed when Greek debt falls due, with 50 percent going into new Greek bonds with a maturity of 30 years instead of five, the newspaper said on its Web site.

Those bonds would pay a basic rate of interest similar to what Greece is paying on loans from the European Union and IMF, with the prospect of investors earning an additional bonus if the Greek economy grows strongly.

The other 20 percent would be reinvested in a zero coupon fund of "high quality securities", which would accumulate interest to be paid at maturity, Le Figaro said.

"It's a solution from the French Banking Federation," the source said, confirming that the report in Le Figaro was "close to reality".


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