Greece's Financial Maneuver: Debt Buyback Sparks Investor Group Formation

Investors holding Greece's GDP-linked debt have formed a group to protect their interests after the government's buyback offer. The group, owning over 40% of the warrants, is challenging the call price's calculation. These instruments, issued during Greece's debt crisis, pay once growth surpasses certain thresholds.

Investors holding Greece's GDP-linked debt instruments have unified to safeguard their interests following the government's announcement to repurchase these securities. The Greek government intends to buy back all outstanding GDP-linked warrants maturing in 2042 at a call price slightly above 25 cents on the euro.

GDP-linked warrants are financial tools that yield returns once economic growth crosses predefined levels. These instruments can be difficult to value and often lack liquidity. The newly established ad-hoc creditor group encompasses a range of major institutional holders, collectively controlling over 40% of these warrants.

The group's formation stems from concerns regarding the calculation of the call price for these securities. As Greece, the EU's most indebted nation, aims to mitigate the remnants of its financial crisis, the country anticipates economic growth of 2.3% this year, outpacing the euro zone's average. The creditor group has engaged White & Case LLP as its legal advisor.

(With inputs from agencies.)