credit suisse_european_economics_greece’s funding gap_oct2012

8/22/2019 CREDIT SUISSE_European_Economics_Greeces funding gap_Oct2012

1/20

European Economics: Greeces funding gap

Yiagos Alexopoulos, +44 20 7888 7536, [email protected]

Giovanni Zanni, +44 20 7888 6827, [email protected]

ANALYST CERTIFICATIONS AND IMPORTANT DISCLOSURES ARE IN THE DISCLOSURE APPENDIX. FOR OTHER IMPORTANT

DISCLOSURES, PLEASE REFER TO https://firesearchdisclosure.credit-suisse.com .

CREDIT SUISSE SECURITIES RESEARCH & ANALYTICS BEYOND INFORMATION

Client-Driven Solutions, Insights, and Access

30 October 2012
mailto:[email protected]:[email protected]://firesearchdisclosure.credit-suisse.com/https://firesearchdisclosure.credit-suisse.com/mailto:[email protected]:[email protected]:[email protected]:[email protected]


2/20

1

Short summary

We estimate the funding gap from a two-year extension at 40bn. Of thatamount,30bn is the net increase from the original programme.

16bn can be covered from a reallocation of funds in the current

programme and other domestic sources, reducing the funding gap to

24bn.

Some form of soft OSI is likely to be needed to finance the remaining

amount.

As no measure alone is enough to finance the shortfall, a combination of

measures will be sought.

Funding gap not imminent in a technical sense. T-bill issuance andfrontloading of already agreed funds can make the funding gap a 2014 (or

even 2015) problem.


3/20

2

Greeces funding gap

Greeces current EU/IMF programme was fully funded until the end of 2014

under the original deficit targets and assumptions on growth, privatisations and

bank recapitalisation needs.

Greece was expected to reach a primary surplus of 4.5% in 2014 and return to

the markets in 2015.

These targets were based on more optimistic assumptions on growth andrequired a fiscal adjustment of 3pp per year.

In order to mitigate the recessionary impact the government is asking for an

extension of the adjustment programme and a relaxation of the deficit targets.

Specifically, it asks to delay the achievement of the 4.5% primary surplus by

two years.

The programme extension and the relaxation of the deficit targets, together

with lower growth and privatisation revenues, create a funding gap.


4/20

3

in bn 2012 2013 2014 2015 2016 2017 2018 2019 2020Funding needs 116.2 29.1 33.2 20.5 10.9 11.2 8.8 13.0 11.9General government deficit 14.2 9.0 3.3 3.0 3.3 2.9 3.0 2.5 2.2Primary deficit 2.0 -3.7 -9.4 -9.7 -10.1 -10.6 -10.5 -11 -11.3Interest payments 10.2 10.8 11.2 11.5 12.5 12.6 12.6 12.6 12.6Cash adjustments 2.0 1.8 1.5 1.3 0.9 0.9 0.9 0.9 0.9Other government cash needs 4.9 4.5 4.5 0.5 0.0 0.0 0.0 0.0 0.0Government arrears 4.0 3.0Cash buffer 1.0 4.0ESM capital contribution 0.9 0.5 0.5 0.5Maturing debt 18.8 15.6 25.4 17.0 7.6 8.3 5.8 10.5 9.7ECB/NCB-held bonds 11.1 8.4 10.0 6.7 2.4 5.3 1.9 5.8 1.4Other bonds and loans 1.7 2.4 8.0 1.7 2.0 1.6 1.4 1.1 1.0EU bilateral loans/EFSF 2.8IMF loans 1.7 7.4 8.6 3.2 1.4 2.5 3.6 4.5T-bill reduction 6.0 3.1Cost of PSI 78.3PSI sweeteners (EFSF-bonds) 29.5Bank recapitalisation 48.8Financing sources 116.5 29.1 33.2 12.9 8.0 6.5 5.4 5.6 5.7Private financing sources 3.2 4.3 4.4 5.7 5.9 6.1 5.1 5.3 5.5Market financingPrivatisation 3.2 4.3 4.4 5.7 5.9 6.1 5.1 5.3 5.5Addi tional OSI 1.3 0.6 0.5 0.6 0.5 0.4 0.3 0.3 0.2EU bilateral loans margin reduction 0.7Grants from NCBs profits 0.7 0.6 0.5 0.6 0.5 0.4 0.3 0.3 0.2EU/IMF loans 112.0 24.2 28.3 6.6 1.6EFSF 105.4 17.6 21.7IMF 6.6 6.6 6.6 6.6 1.6Funding shortfall -0.3 0.0 0.0 7.6 2.9 4.7 3.4 7.4 6.2Cumulati ve short fall -0.3 -0.3 -0.3 7.3 10.2 14.9 18.2 25.6 31.9

Original financing needs and sources

Source: European Commission, Credit Suisse


5/20

4

How big is the funding gap?


6/20

5

Initial funding gap in 2015-16

Under the original programme a funding gap was expected for 2015-16 (whichwould be funded by Greeces return to the markets).

The gap is mainly due to redemptions of ECB-held bonds (as the IMF is

expected to roll over most of its maturing loans).

The funding gap in 2015-16 amounts to around 10bn.


7/20

6

Funding gap arising from change in deficit targets andlower growth

The relaxation of the deficit targets creates an additional funding gap.

At the same time, lower growth than originally expected and recent GDP

revisions further add to this gap.

The above result in an additional funding gap of 16bn.

Funding shortfall due to lower growth and the change in deficit targetsin bn

2012 2013 2014 2015 2016

Nominal GDP ( bn)Original assumptions 204 203 208 216 225New assumptions 195 186 186 192 200Primary balance (% GDP)Original target -1.0% 1.8% 4.5% 4.5% 4.5%New target -1.5% 0.0% 1.5% 3.0% 4.5%Contribution to funding shortfall 0.9 3.7 6.6 4.0 1.1Cumulative shortfall 0.9 4.5 11.1 15.1 16.2



8/20

7

Funding gap arising from a change in the privatisationtarget

Underperformance so far and worse economic environment have led to arevision of the privatisation targets in the short to medium term.

This creates an additional funding gap of 14bn.

Funding shortfall due to the change in privatisation targets

in bn2012 2013 2014 2015 2016

Privatisatio n revenues ( bn)

Original targets 3.2 4.3 4.4 5.7 5.9

New targets 0.1 3.3 2.3 1.2 2.6

Contribution to fund ing short fall 3.1 1.0 2.1 4.5 3.3

Cumulative shortf all 3.1 4.1 6.2 10.7 14.0



9/20

8

Overall funding gap

The overall funding gap from a programme extension up to 2016 would be 40bn.

Of that amount,30bn is the net increase compared with the original programme.

We have assumed that the funds provided for the recapitalisation of the banks would be

sufficient. Any additional bank recapitalisation needs will add to the funding gap.

The rest of the needs are either more clearly defined (e.g., redemptions) or we do not

expect them to deviate significantly (e.g., interest payments, government arrears) from

current policies.

Overall funding gap from programme extension

2012 2013 2014 2015 2016 Total

Original funding shortfall in 2015-16 -0.3 0 0 7.6 2.9 10.2

Funding shortfall due to the change in deficit targets 0.9 3.7 6.6 4.0 1.1 16.2

Funding shortfall due to the change in privatisation targets 3.1 1.0 2.1 4.5 3.3 14.0

Total 3.7 4.7 8.7 16.1 7.3 40.4

Cumu lative shortf all 3.7 8.3 17.0 33.1 40.4



10/20

9

Ways to cover the funding gap?


11/20

10

Ways to cover the funding gap

One straightforward option would be for the official creditors to cover thefunding gap, through a direct loan. Initial resistance to such an option has

somewhat softened in recent weeks.

Alternatively (or jointly with the above) a combination of other ways may be

considered:

First, there are sources inside the current programme that can limit the shortfall.

Second, different types of soft OSI (official sector involvement) can be agreed to

finance the gap.


12/20

11

Financing sources inside the current programme

A reallocation of funds in the current programme can l imit the short fal l, in our view.

The original programme envisages a reduction of the T-bill stock by 9bn in 2012-13. If instead it waskept at current levels, this amount could be used to cover part of the funding shortfall.

At the same time, the programme plans for an additional cash buffer of 5bn, on top of an existing

one of 3bn. Instead, it could be used to finance the gap.

Greece could also roll over domestic debt (e.g., Bank of Greece legacy debt) that could save an

additional 2.5bn, on our calculations.

Once this has been taken into account, Greeces funding gap would be 24bn.

Funding gap after internal sources are used

in bn2012 2013 2014 2015 2016 Total

Overall funding gap from program extension 3.7 4.7 8.7 16.1 7.3 40.4

minus: T-bill reduction -6.0 -3.1 -9.1

minus: cash buffer -1.0 -4.0 -5.0

minus: domestic debt -0.6 -0.6 -0.6 -0.6 -0.6 -2.4

Funding shortf all -2.3 0.0 4.1 15.5 6.7 23.9

Cumulative sho rtf all -2.3 -2.4 1.7 17.2 23.9



13/20

12

OSI ways to fund the gap

There can be many different OSI variations, but we focus on afew main ones:

EU involvement: Either a reduction in interest payments, postponement of

interest payments or a haircut.

ECB/NCB involvement: Redistribution of ECB profit, extension of ECB/NCB-

held maturities. NCB involvement only, including a haircut or an extension of

maturities.

Other types, such as IMF involvement or a bond buyback.


14/20

13

OSI ways to fund the gap: EU involvement

One (but not very effective) option to limit the gap would be a reduction in the interest rate on bilateral

loans. Currently Greece is paying 3M Euribor+150bps. If it were to be reduced by 1pp, Greece could

save 2bn by 2016.

A more effective way that would cover most of the gap would be a postponement of EU/EFSF interest

payments (e.g., until Greece reaches a certain growth rate).A moratorium on in terest payments to

2016 would save 23bn in funding needs.

A haircut on the bilateral loans strongly opposed by euro area countries would have an impact on the

funding gap only through the interest payments channel, since repayment of EU loans only starts in 2020

(e.g., a 50% haircut on bilateral loans would save around 2.5bn in funding needs by 2016).

EU/EFSF official financing sources 2013 2014 2015 2016 Total

Reduction in bilateral loans int. rate (by 1pp) 0.5 0.5 0.5 0.5 2.1Postponement on interest paymentsEU bilateral loans 1.3 1.3 1.3 1.3 5.3EFSF loans 3.7 4.3 5.1 5.1 18.1Both EU/EFSF 5.0 5.6 6.4 6.4 23.4



15/20

14

OSI ways to fund the gap: ECB/NCB involvement

A haircut of the ECB/NCB-held bonds or an extension would have a meaningful impact on financing the

funding gap, since between 2013 and 2016 27bn of ECB/NCB-held bonds mature.

Given the ECB opposition to a restructuring of its bonds under the SMP, a less costly way would be for

the ECB profits on those bonds to be redistributed back to Greece (6bn by 2016). Also, the bonds

in the investment portfolios of national central banks could be restructured. For example, an extension of

these maturities would save Greece 6bn in funding needs by 2016, on our estimates.

ECB/NCB of ficial fin ancing sources 2013 2014 2015 2016 Total

ECB redistributing profit (30%) 2.0 2.6 1.5 0.2 6.2Extension of ECB/NCB maturities (net effect) 8.4 9.6 5.7 1.0 24.7NCB investment portfolio haircut (50%) 1.2 0.9 1.1 0.9 4.2Extension of NCB maturities (net effect) 1.8 1.4 1.6 1.4 6.2Memo:ECB-held bonds (est.) 6.6 8.6 4.9 0.8 20.8NCB-held bonds (est.) 1.8 1.5 1.8 1.6 6.7ECB/NCB-held bonds 8.4 10.0 6.7 2.4 27.5



16/20

15

OSI ways to fund the gap: Other types

IMF involvement Between 2013 and 2016 21bn of IMF loans have to be repaid. The IMF is

providing most of the funds to roll over those maturities.

An extension of these maturities, although beneficial, seems highly unlikely.

The IMF appears unwilling to increase its overall exposure to Greece further

and also the IMF loans are less flexible to changes in their structure.

Bond buyback

A bond buyback, although potentially helpful for the reduction of the debt,

would have limited benefits as far as the funding gap is concerned (2-4bn).


17/20

16

How would the funding gap be covered?

The funding gap could be covered with a combination of the measures discussed above.

Greece could be allowed to keep its T-bill issuance at current levels. The NCBs could restructure their bonds, the ECB redistribute profits and the EU lower interest rates

on bilateral loans. Nevertheless, this might not be enough.

An ECB restructuring does not seem likely at this stage, nor does further IMF involvement.

The postponement of interest payments on EU/EFSF loans would be an effective way to

finance the gap (23bn), given current political constraints.

Greece's funding gap from a two-year programme extension

2012 2013 2014 2015 2016 Total

Overall funding gap from programme extension 3.7 4.7 8.7 16.1 7.3 40.4

minus: T-bill reduction, cash buffer, domestic debt -6.0 -4.7 -4.6 -0.6 -0.6 -16.5

Funding short fall after internal sources -2.3 0.0 4.1 15.5 6.7 23.9

minus:

reduction in the interest rate of bilateral loans (by 1pp) -0.5 -0.5 -0.5 -0.5 -2.1

ECB redistributing profit (30%) -2.0 -2.6 -1.5 -0.2 -6.2

extension of NCB maturities (net effect) -1.8 -1.4 -1.6 -1.4 -6.2

Final funding shortf all -2.3 -4.4 -0.4 11.8 4.6 9.4



18/20

17

T-bills and disbursement front-loading could make thefunding gap a 2014 (or even a 2015) problem

If there is front-loading of the funds in the current programme or if the T-billstock remains constant, then the funding gap would only appear in 2014 or

even 2015.

After considering T-bill issuance, the cumulative shortfall in 2014 would be

around 9bn, compared with 2015-16 disbursements of 8bn.

Front-loading and T-bills co uld make the funding gap a future concern 2012 2013 2014 2015 2016

Overall funding gap from programme extension 3.7 4.7 8.7 16.1 7.3minus: T-bill reduction -6.0 -3.1Funding gap -2.3 1.6 8.7 16.1 7.3Cumulative funding gap -2.3 -0.8 8.7 24.7 7.3

Planned disbursements 112.0 24.2 28.3 6.6 1.6EFSF 105.4 17.6 21.7

IMF 6.6 6.6 6.6 6.6 1.6Source: European Commission, Credit Suisse


19/20

18

Funding gap is different from debt sustainability

There are currently two main stumbling blocks in the Greek programme: the funding gap to 2016 and

the high debt level.

These are two different problems and there are few solutions that can solve both of them at the same

time most of them currently not politically acceptable.

Apart from the IMFs pressure for a solution to the debt problem, there is no other hard constraint for

EU politicians to come up with an overall solution now, since Greece does not plan to return to the

markets for at least the next two to three years.

Therefore, an EU/ECB-IMF compromise at this stage seems likely, with a decision on the debt being

postponed to a future date.

Estimated effect of measures on funding needs and debt levels

Effect on funding needs to 2016 Effect on d ebt level in 2020Reduction in bilateral loans' int. rate (1pp) 2.1bn 2.5% of GDP lowerPostponement of EU/EFSF int. payments 23.4bn -ECB redistributing profit (30%) 6.2bn 4% of GDP lowerExtension of ECB/NCBs maturities 24.7bn marginally higherNCB investment portfolio haircut 4.2bn 3.5% of GDP lowerExtension of NCB maturities 6.2bn marginally higherBond buyback 2bn lower for every 10bn spent* 10-13% of GDP for every 10bn spent*

*Assuming buyback price at 20% premium to market value (25%).

Source: Credit Suisse


20/20

19

Disclosure AppendixAnaly st Certi ficat ion

The analysts identified in this report each certify, with respect to the companies or securities that the individual analyzes, that (1) the views expressed in this report accurately reflect his or her personal views about all of the subject companies and securities and (2) no part of his or her

compensation was, is or will be directly or indirectly related to the specific recommendations or views expressed in this report.

DisclaimerReferences in this report to Credit Suisse include all of the subsidiaries and affiliates of Credit Suisse operating under its investment banking division. For more information on our structure, please use the following link: https://www.credit-suisse.com/who_we_are/en/ . This report may containmaterial that is not directed to, or intended for distribution to or use by, any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction where such distribution, publication, availability or use would be contrary to law or regulation or which would subjectCredit Suisse AG or its affiliates ("CS") to any registration or licensing requirement within such jurisdiction. All material presented in this report, unless specifically indicated otherwise, is under copyright to CS. None of the material, nor its content, nor any copy of it, may be altered in any way,

transmitted to, copied or distributed to any other party, without the prior express written permission of CS. All trademarks, service marks and logos used in this report are trademarks or service marks or registered trademarks or service marks of CS or its affiliates. The information, tools andmaterial presented in this report are provided to you for information purposes only and are not to be used or considered as an offer or the solicitation of an offer to sell or to buy or subscribe for securities or other financial instruments. CS may not have taken any steps to ensure that the securitiesreferred to in this report are suitable for any particular investor. CS will not treat recipients of this report as its customers by virtue of their receiving this report. The investments and services contained or referred to in this report may not be suitable for you and it is recommended that you consult anindependent investment advisor if you are in doubt about such investments or investment services. Nothing in this report constitutes investment, legal, accounting or tax advice, or a representation that any investment or strategy is suitable or appropriate to your individual circumstances, orotherwise constitutes a personal recommendation to you. CS does not advise on the tax consequences of investments and you are advised to contact an independent tax adviser. Please note in particular that the bases and levels of taxation may change. Information and opinions presented in thisreport have been obtained or derived fromsources believed by CS to be reliable, but CS makes no representation as to their accuracy or completeness. CS accepts no liability for loss arising from the use of the material presented in this report, except that this exclusion of liability does not apply tothe extent that such liabi lity arises under specific statutes or regulations applicable to CS. This report is not to be relied upon in substitution for the exercise of independent judgment. CS may have issued, and may in the future issue, other communications that are inconsistent with, and reachdifferent conclusions from, the information presented in this report. Those communications reflect the different assumptions, views and analytical methods of the analysts who prepared themand CS is under no obligation to ensure that such other communications are brought to the attention ofany recipient of this report. CS may, to the extent permitted by law, participate or invest in financing transactions with the issuer(s) of the securities referred to in this report, performservices for or solicit business fromsuch issuers, and/or have a position or holding, or other material interest, oreffect transactions, in such securities or options thereon, or other investments related thereto. In addition, it may make markets in the securities mentioned in the material presented in this report. CS may have, within the last three years, served as manager or co-manager of a public offering ofsecurities for, or currently may make a primary market in issues of, any or all of the entities mentioned in this report or may be providing, or have provided within the previous 12 months, significant advice or investment services in relation to the investment concerned or a related investment.

Additional information is, subject to duties of confidentiality, available on request. Some investments referred to in this report will be offered solely by a single entity and in the case of some investments solely by CS, or an associate of CS or CS may be the only market maker in such investments.Past performance should not be taken as an indication or guarantee of future performance, and no representation or warranty, express or implied, is made regarding future performance. Information, opinions and estimates contained in this report reflect a judgment at its original date of publicationby CS and are subject to change without notice. The price, value of and income fromany of the securities or f inancial instruments mentioned in this report can fall as well as rise. The value of securities and financial instruments is subject to exchange rate fluctuation that may have a positive oradverse effect on the price or income of such securities or financial instruments. Investors in securities such as ADR's, the values of which are influenced by currency volatility, effectively assume this risk. Structured securities are complex instruments, typically involve a high degree of risk andare intended for sale only to sophisticated investors who are capable of understanding and assuming the risks involved. The market value of any structured security may be affected by changes in economic, financial and political factors (including, but not limited to, spot and forward interest andexchange rates), time to maturity, market conditions and volatility, and the credit quality of any issuer or reference issuer. Any investor interested in purchasing a structured product should conduct their own investigation and analysis of the product and consult with their own professional advisersas to the risks involved in making such a purchase. Some investments discussed in this report may have a high level of volatility. High volatility investments may experience sudden and large falls in their value causing losses when that investment is realised. Those losses may equal your originalinvestment. Indeed, in the case of some investments the potential losses may exceed the amount of initial investment and, in such circumstances, you may be required to pay more money to support those losses. Income yields from investments may fluctuate and, in consequence, initial capitalpaid to make the investment may be used as part of that income yield. Some investments may not be readily realisable and it may be difficult to sell or realise those investments, similarly it may prove difficult for you to obtain reliable information about the value, or risks, to which such an

investment is exposed. This report may provide the addresses of, or contain hyperlinks to, websites. Except to the extent to which the report refers to website material of CS, CS has not reviewed any such site and takes no responsibility for the content contained therein. Such address or hyperlink(including addresses or hyperlinks to CS's own website material) is provided solely for your convenience and information and the content of any such website does not in any way form part of this document. Accessing such website or following such link through this report or CS's website shall beat your own risk. This report is issued and distributed in Europe (except Switzerland) by Credit Suisse Securities (Europe) Limited, One Cabot Square, London E14 4QJ, England, which is regulated in the United Kingdomby The Financial Services Authority ("FSA"). This report is being distributedin Germany by Credit Suisse Securities (Europe) Limited Niederlassung Frankfurt amMain regulated by the Bundesanstalt fuer Finanzdienstleistungsaufsicht ("BaFin"). This report is being distributed in the United States and Canada by Credit Suisse Securities (USA) LLC; in Switzerland by CreditSuisse AG; in Brazil by Banco de Investimentos Credit Suisse (Brasil) S.A or its affiliates; in Mexico by Banco Credit Suisse (Mxico), S.A. (transactions related to the securities mentioned in this report will only be effected in compliance with applicable regulation); in Japan by Credit SuisseSecurities (Japan) Limited, Financial Instruments Firm, Director-General of Kanto Local Finance Bureau (Kinsho) No. 66, a member of Japan Securities Dealers Association, The Financial Futures Association of Japan, Japan Investment Advisers Association, Type II Financial Instruments Firms

Association; elsewhere in Asia/ Pacific by whichever of the following is the appropriately authorised entity in the relevant jurisdiction: Credit Suisse (Hong Kong) Limited, Credit Suisse Equities (Australia) Limited, Credit Suisse Securities (Thailand) Limited, Credit Suisse Securities (Malaysia) SdnBhd, Credit Suisse AG, Singapore Branch, Credit Suisse Securities (India) Private Limited regulated by the Securities and Exchange Board of India (registration Nos. INB230970637; INF230970637; INB010970631; INF010970631), having registered address at 9th Floor, Ceejay House,Dr.A.B.Road, Worli, Mumbai - 18, India, T- +91-22 6777 3777, Credit Suisse Securities (Europe) Limited, Seoul Branch, Credit Suisse AG, Taipei Securities Branch, PT Credit Suisse Securities Indonesia, Credit Suisse Securities (Philippines ) Inc., and elsewhere in the world by the relevant authorisedaffiliate of the above. Research on Taiwanese securities produced by Credit Suisse AG, Taipei Securities Branch has been prepared by a registered Senior Business Person. Research provided to residents of Malaysia is authorised by the Head of Research for Credit Suisse Securities (Malaysia)Sdn Bhd, to whom they should direct any queries on +603 2723 2020. This research may not conformto Canadian disclosure requirements. In jurisdict ions where CS is not already registered or licensed to trade in securities, transactions will only be effected in accordance with applicablesecurities legislation, which will vary fromjurisdiction to jurisdiction and may require that the trade be made in accordance with applicable exemptions fromregistration or licensing requirements. Non-U.S. customers wishing to effect a transaction should contact a CS entity in their local jurisdictionunless governing law permits otherwise. U.S. customers wishing to effect a transaction should do so only by contacting a representative at Credit Suisse Securities (USA) LLC in the U.S. Please note that this research was originally prepared and issued by CS for distribution to their marketprofessional and institutional investor customers. Recipients who are not market professional or institutional investor customers of CS should seek the advice of their independent financial advisor prior to taking any investment decision based on this report or for any necessary explanation of itscontents. This research may relate to investments or services of a person outside of the UK or to other matters which are not regulated by the FSA or in respect of which the protections of the FSA for private customers and/or the UK compensation scheme may not be available, and further detailsas to where this may be the case are available upon request in respect of this report. CS may provide various services to US municipal entities or obligated persons ("municipalities"), including suggesting individual transactions or trades and entering into such transactions. Any services CSprovides to municipalities are not viewed as "advice" within the meaning of Section 975 of the Dodd-Frank Wall Street Reformand Consumer Protection Act. CS is providing any such services and related information solely on an arm's length basis and not as an advisor or fiduciary to themunicipality. In connection with the provision of the any such services, there is no agreement, direct or indirect, between any municipality (including the officials, management, employees or agents thereof) and CS for CS to provide advice to the municipality. Municipalities should consult with theirfinancial, accounting and legal advisors regarding any such services provided by CS. In addition, CS is not acting for direct or indirect compensation to solicit the municipality on behalf of an unaffiliated broker, dealer, municipal securities dealer, municipal advisor, or investment adviser for thepurpose of obtaining or retaining an engagement by the municipality for or in connection with Municipal Financial Products, the issuance of municipal securities, or of an investment adviser to provide investment advisory services to or on behalf of the municipality. If this report is being distributedby a financial institution other than Credit Suisse AG, or its affiliates, that financial institution is solely responsible for distribution. Clients of that institution should contact that institution to effect a transaction in the securities mentioned in this report or require further information. This report does not

constitute investment advice by Credit Suisse to the clients of the distributing f inancial institution, and neither Credit Suisse AG, its affiliates, and their respective officers, directors and employees accept any liability whatsoever for any direct or consequential loss arising fromtheir use of this reportor its content. Principal is not guaranteed. Commission is the commission rate or the amount agreed with a customer when setting up an account or at any time after that.Copyright 2012 CREDIT SUISSE GROUP AG and/or its affil iates. All rights reserved.

Investment principal on bonds can be eroded depending on sale price or market price. In addition, there are bonds on which investment principal can be erodeddue to changes in redemption amounts. Care is required when investing in such instruments.When you purchase non-listed Japanese fixed income securities (Japanese government bonds, Japanese municipal bonds, Japanese government guaranteed bonds, Japanese corporate bonds) from CS as a seller, you will be requested to pay the purchase price only.
https://www.credit-suisse.com/who_we_are/en/https://www.credit-suisse.com/who_we_are/en/https://www.credit-suisse.com/who_we_are/en/https://www.credit-suisse.com/who_we_are/en/https://www.credit-suisse.com/who_we_are/en/https://www.credit-suisse.com/who_we_are/en/https://www.credit-suisse.com/who_we_are/en/https://www.credit-suisse.com/who_we_are/en/https://www.credit-suisse.com/who_we_are/en/https://www.credit-suisse.com/who_we_are/en/

credit suisse_european_economics_greece’s funding gap_oct2012

Documents