Greek gov’t issues ministerial act on CoCos for bank recapitalization
The Greek government on Tuesday issued a ministerial council act on the details of the recapitalization of banks defining an 8.0 % interest on bonds and mentioning the operation of CoCos (convertible bonds) with which Hellenic Financial Stability Fund will cover additional capital needs of Greek banks.
These bonds will have an annual interest rate of 8.0% and would be automatically converted into common shares if the credit institution failed to pay interest in two payment dates
Credit institutions would be able 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.