Skip to main content
No. of Recommendations: 0
Just out of curiosity...

In a private tender outside of bankruptcy, any principal reduction must be agreed to by the bondholders voluntarilly. So, small holders can acquire debt on the cheap, not tender, and free-load off the big-boys haircut (if you'll excuse the pejorative phrasing; heck we little-guys need to have some advantages in this tilted game).

I'm curious if that holds in a politically forced workout outside of bankruptcy. All the news items keep talking about the banks being forced to agree to a reduction in principal. Is this an across the board reduction jammed down everyone's throat? Or is it a situation analagous to a corporate workout, where the principal reduction is confined to those parties directly consenting to the resolution? I presume the former, a la GM's collapse, but that was in a formal state of bankruptcy, which isn't the case for Greece at the moment.

Print the post  


What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.