The final results of today's Greek credit default swap auction are in! Greece's old bonds have been valued at 21.5% of their face value, following its debt restructuring. That means that CDS contracts should pay out 78.5 cents in the euro. The total net value of CDS contracts on Greek debt comes to around $3.2bn, which means (I think) that the banks who issued that debt must pay out around $2.5bn to those who took out the insurance. Credit default swaps are meant to protect against losses on bonds -- so today's auction has effectively found that Greek bond with a face value of €1m would only be worth €215,000. So, if the investor had also taken out €1m of Greek debt insurance through a CDS, s/he should receive €785,000 to cover the loss on the bond.Or as Markit (which conducted the auction) explained: Market participants who bought protection against a Hellenic Republic default will receive the face value of their bonds in exchange for a payment of 21.5% of face value to protection sellers. UPDATE: Reuters has also calculated that the auction means CDS contracts will pay out around $2.5bn. In conclusion : Greece's creditors are due to receive $2.5bn in insurance payments, following the country's debt restructuring. A credit default swap auction that Greek bonds are worth 21.5% of their face value.
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As part of the further integration of Britain into all things European Rebecca Harris MP introduced the Private Members Bill on 30 June 2010 to ‘require the Secretary of State to conduct a cross-Departmental analysis of the potential costs and benefits of advancing time by one hour for all, or for part of the year’ and ‘to require the Secretary of State to take certain action in the light of that analysis; and for connected purposes.’ The Bill passed Second Reading in the House of Commons on 3 December 2010. The 9th European Commission Directive on summer time harmonised, for an indefinite period, the dates on which summer time begins and ends across member states as the last Sundays in March and October respectively. Under the Directive, summer time begins and ends at 1.00 am GMT in each Member State. Amendments to the Summer Time Act to implement the Directive came into force on 11 March 2002. By Britain being ‘in time’ with the rest of Europe it will make it easier to bring in the final changes before switching to the Euro. These things are just bricks going to build the same wall. Like or hate it the politicians are going forward with the United States of Europe. It is too late for us to do anything about it now. The time for action was twenty or thirty years ago when the European Parliament was being out together. We all stood by, watched and did absolutely nothing to stop it. We in Britain have ourselves to blame - instead we waste time blaming each other.
Finally we have it. George Osborne's plan to get Britain's banks lending: credit easing . Fair to say this one hasn't bowled too many people over.
The plan - which will see lenders shave a percentage point off borrowing costs with the help of Government backing - is designed to drive businesses to their banks. The difficulty is that with the economy moribund at best, the last thing many companies want to do is raise more debt. RBS said only last week that it was approving 90pc of loan applications – is a percentage point of interest really going to make that much difference? Still, poor old George has got to try, hasn't he?
He should at least get a fillip from the inflation numbers which are out later this morning. The headline rate is forecast to have slowed to 3.3pc in February, down from 3.6pc a year earlier. That's from a high of 5.2pc in September last year. At least some things are going right.
Elsewhere on the economics front, we get CBI industrial trends data and CML mortgage lending figures for February, while Bank of England chief economist Spencer Dale is set to give a speech at Aberystwyth University this evening.
On the international stage Greece is set to make the first repayment on its €14.4bn bond today, while in the US we've got the first Chapter 11 Eastman Kodak hearing.
Among UK companies, Cairn Energy has announced a $4.6bn profit, despite $1.1bn of losses and impairments linked to drilling in Greenland. Nevertheless the company said it’s sticking to its guns in the country and is confident things will come good there soon.
We’ve got a solid trading update from Debenhams, which has proved there’s life on the high street yet with a 2.4pc increase in like-for-like sales in the eight weeks to the beginning of March. Meanwhile, Supergroup – perhaps responding to operational issues in recent months – has appointed John Lewis fashion and beauty chief Susanne Given to a new role of chief operating officer. Shaun Wills, formerly Habitat chief operating officer, is joining as finance director.
There’s bad news on the pharma front. AstraZeneca has announced that trials of its TC-5214 anti-depressant treatment haven’t made it through testing. The company is taking a $50m impairment charge as a result.
In the US we get quarterly numbers from Tiffany. Just to remind us how the rich and famous are spending their money.
Oriel Securities was bullish about BT Group's prospects following talk it is about to inject up to £1.5bn into its final salary pension fund.
The move, reported over the weekend, would not only help the company tackle its £5.4bn shortfall but also help it secure a multi-million-pound tax credit - as companies receive tax relief on the cash they pay into their pension schemes.
"A large, early pension top-up payment will persuade more investors to look beyond BT's pension deficit, and instead focus much more on the group's strong cash flow growth prospects (and thus also on BT's strong dividend growth and capital appreciation prospects)."
Sterling slipped versus the euro but strengthened against the dollar on Monday. The pound fell 0.26 cents to €1.2003 and added 0.49 cents to $1.5893. For the latest on the currency markets, click here.
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