Allianz plans a rollover of EUR 300 M in Greek bonds

Standard & Poor’s warns that restructuring of Greece’s debt would effectively constitute a default.

Europe’s largest insurance company Allianz plans a rollover of Greek bonds as part of the private sector’s contribution as announced by Eurozone countries. According to Wall Street Journal, Allianz will reinvest EUR 300 M of Greek bonds into new securities, according to news agency reports that cite company spokesperson Christina Kroos. Allianz Chief Executive Officer Michael Diekmann had told Germany’s Spiegel magazine that the company would contribute that amount to the rescue package being prepared for Greece through 2014. Germany’s Finance Minister Wolfgang Schaeuble had said last week that the country’s financial institutions will contribute EUR 3.2 bln, agreeing to roll over at least their Greek debt holdings that mature by 2014. Last week, also, sources said Deutsche Bank was likely to contribute less than EUR 1 bln, while Commerzbank, Germany’s second-biggest lender, was likely to contribute far less than EUR 1 bln, as BBC informs. Diekmann also told that Allianz had made a proposal of how to protect taxpayers from having to bear the burden of Greece’s high debts. Rating agency Standard & Poor’s (S&P) rang a fresh warning on Monday about Greek debt despite a weekend deal, renewing unease on markets where analysts highlighted a eurozone delay over a new rescue. S&P warned that proposals floated by the French Bank Federation risked putting Greece into a selective default, a possibility with potential domino effects of deep concern to financial markets. S&P lowered the long-term rating on the Hellenic Republic (Greece) to ‘CCC’ from ‘B’. The euro weakened versus the yen, reversing earlier gains, after S&P affirmation. The 17-nation currency had advanced 0.3 percent earlier against its Japanese counterpart on speculation the European Central Bank will increase interest rates this week. World stocks hit a 4-1/2 week high on Monday and oil rose as investors grew confident over the prospects for the global economy after Greece avoided an early default on its debt.

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