Forex Flash: Risks associated with recent Greek resolution – ING (Barcelona) - In Greece, the country should receive a first tranche of €34.4B, divided in €23.8B of EFSF bonds for bank recapitalization and €10.6B for budgetary financing. This disbursement will take place on 13 December, subject to the completion of national parliamentary procedures and following a review of the outcome of possible Greek debt buybacks.

This disbursement represents the first sub-tranche of the €43.7B total payment. The remaining €9.3B is to be disbursed in three sub-tranches in the first quarter of 2013, conditional on the implementation of the MoU milestones (including the agreed tax reform by January).

According to Alexando Giansanti, an Analyst at ING, “There are still risks associated with the deal, as countries like Germany and Finland will need the parliamentary approval in the next few days. Moreover, Portugal and Ireland could ask for a similar deal on the EFSF loans.” In the meantime the EFSF, after postponing the issuance of the 3yr benchmark, has moved on with the 1yr tenor. It successfully raised €7.0B from the market at an average yield of 0.22%, after having received orders in the area of €9bn. Investors were lured by the generous carry vs. other core issuers.

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