Market participants are gearing up for the possibility that Greece will have to restructure its debt or even default. "Investors and analysts are now running the numbers to see what a haircut to Greek bonds would be," said Steven Major, global head of fixed-income research at HSBC. "One way to do this is to compare restructurings for emerging-market sovereigns. Based on the defaults over the last 12 years, the average long-term recovery rate is close to 70%. Ultra-long Greek bonds currently trade at a price below this."
Published in Brief: