LONDON (Reuters) -Investors holding Greece’s growth-linked debt instruments have formed a group to represent their interests, they said, after the government announced earlier this month it planned to buy back the securities.
Greece has told its investors that it wanted to repurchase all of the outstanding GDP-linked warrants due in 2042 for a call price of just over 25 cents on the euro. In a note on May 7, it also said it would seek clarification from an English court on the legal validity and that the call price had been calculated correctly.
GDP-linked warrants are fixed income instruments that usually pay out once economic growth exceeds a certain threshold. They can be highly illiquid and complex to value.
The ad-hoc creditor group counts large institutional holders among its members and owns or controls more than 40% of the GDP-linked warrants. It said in a statement released late on Thursday that it had formed to consider “certain matters” linked to the buyback.
“The group has expressed concerns, in particular the calculation of the call price for the securities,” it said.
Greece issued the warrants in 2012 as part of the country’s behemoth debt overhaul. Similar instruments have also been issued by Ukraine and Argentina in recent debt restructurings.
Greece – the European Union’s most indebted country – is seeking to clear the legacy of its 2009-2018 crisis when it nearly dropped out of the euro zone and years of unrest ensued as ordinary citizens fought against austerity-induced cuts in wages and pensions.
The government expects 2.3% growth this year, twice the euro zone’s average.
The creditor group has retained White & Case LLP as legal adviser.
(Reporting by Karin Strohecker; editing by Barbara Lewis)
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