Good morning

The headlines:
  1. Around 60% of private bondholders have signed up for the Greek Debt swap, according to Bloomberg. Obviously, that includes most of the big banks and insurers, who will hold the biggest volumes of greek bonds. The real question is, as a private bondholder, would I actively volunteer to take the swap? Well – let’s say that I don’t. One of two things could happen. In the first, enough investors sign up, in which case Greece utilises the CACs (Collective Action Clauses), and I am forced into the swap: I am therefore in the same position as I would have been had I volunteered to swap – with the potential upside that if I hold any CDS instruments over the debt, these will be triggered. In the second situation, not enough investors sign up, Greece doesn’t get the current bailout package, and it all turns into a game of economic chicken with the ECB. To me, the solution is clear: volunteer to swap. Dear parasite, don’t kill your host. Link: 60% of private bondholders so far.
  2. Facebook has secured an $8 billion line of credit ahead of its IPO. My question still is: what are they using all of this financing for? It’s crazy to me – an internet-based business surely doesn’t have the capital requirement of, say, an Apple Inc. – that produces commodities. Maybe there are plans afoot to do a Google – and expand into smart-phones and tablets and operating systems? Either way – for now, at least – some of that capital is being used to pay out employees that have exercised their stock options ahead of the IPO. The great Facebook cash-in. Link: Facebook’s new credit line.
  3. Emerging Market stocks and exchange-traded funds are going through a slump, on the back of Greek debt swap fears (see point 1 about the CACs), Chinese economic growth retraction, and disappointing Brazilian growth. Link: Emerging-Market Stocks in slump.
  4. Brazil cut its interest rates by 75 bps yesterday to 9.75%. Apparently, policymakers had “lost patience”. The growth VS inflation debate continues. Link: Brazil speeds up interest rate cuts.
  5. SABMiller is spreading the Chibuku brand across Africa. Now this has real home-grown roots for me – Chibuku began life as the Zimbabwean informal beer in the 1950s. It also has the texture and smell of what generally happens after you’ve had too much of it and the inevitable resurgence happens. But the informal beer market is projected to be four times as large the clear beer market, but it costs about 40% less. But it is also far cheaper to produce. And in 2009, SABMiller estimated that the informal beer market is worth about $3 billion. SABMiller plans to spread Chibuku into 12 countries over the next 3 years. Viva Zimbabwe. Link: SABMiller and Chibuku for the win.
  6. And the Africa Business News in brief. Link:ABN Briefs. The highlights:
    • The Zimbabwe Government has rejected the Zimplats request for a 30 day extension to come up with a new plan for handing over a 29.5% stake in the Zimbabwean operation. After talks broke down, the Zimbabwean government is expected to announce the fate of the Implats shareholding later today.
    • MTN has announced a 43% increase in its full-year adjusted headline earnings per share. The figure is “adjusted” because it restated prior year figures downward by nearly 18%. There is an external auditor in there somewhere that feels very proud of themselves for finding that error: an external auditor that someone else wants to fire. For sure.
    • South Sudan is planning on exporting some of its oil by road until the new pipelines are ready.
That’s all for now.
Have a great Thursday.