The Institute of International Finance said Tuesday that significant differences remain unresolved between Greece and its private creditors over a 50% haircut.
"There are still very important issues that have to be resolved," said Frank Vogl, the media adviser for the IIF. The banking group IIF represents the private creditors in their talks with Greece.
Talks between the two sides will resume in Athens on Wednesday after breaking up on Friday over differences on the coupon of the new bonds that will be issued by Greece. The plan is that the €206 billion ($260.94 billion) in debt held by the creditors will be cut by half in a bond swap. The new paper will mature in 20 to 30 years.
Officials with direct knowledge of the talks have said Athens wants the new paper to carry an average coupon of around 4.5%, while the IIF wants a coupon of slightly above 5%, and Greece's sovereign creditors, including Germany and the International Monetary Fund, are pushing for a coupon significantly below 4%.
The haircut is an integral part of a €130 billion second bailout loan for Greece, without which the country will default in March when it has to pay back €14.4 billion in bond redemptions.
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