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A proposal to offset loans

17/11/2015 13:13
Parliament speaker Yiannakis Omirou who this morning met with the association of bond holders, submitted a draft bill for netting loans made in order to purchase bond securities with loans of such bond holders who are not professionals.

The parliament speaker presented to members of the association the proposal, which provides that loans, which were guaranteed by bonds or were granted in order to purchase such bonds issued by financial institutions, will be offset with the current amount of the loan or other credit facilitation for restructuring purposes.

The adjustment will concern non-professional investors exclusively and the amount to be offset will be the nominal value of the securities, minus any interest paid.

The bill affects about 1850 bond holders who have loans of € 180 mn from Laiki Bank and €20 mn from the Bank of Cyprus.

According to the parliament speaker, offsetting will cover 5% of the bonds, noting that the legality of extending loans for the purchase of bonds is before the courts.

The chairman of the association of bond holders Foivos Mavrovouniotis, welcomed the submission of the law proposal, adding that thousands of bond holders have appealed to justice.