Terms of EU Support for Greece

The euro has strengthened significantly over the past 24 hours as EU officials finalize a prescription for Greece. Here are the details:

1) bilateral loans from European governments for 3 years

2) up to €30bn lending by euro area members states for the first year, in addition to the IMF’s contribution (€12.5 to 15bn reportedly)

3) lending rates near 5% calculated as 3-month euribor plus 300bp spread with further 100bp for more than 3 years and plus 50bp for operational cost

4) IMF loans priced according to their formula (currently 3.25% for a loan of 10x quota)

The package is larger than the market had anticipated and the rate is much lower than market rates.

eur/usd Kathy Lien

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