Bond insurance firms do business by guaranteeing payment on a bond.
There are questions over how it will make a 3bn-euro bond payment next month.
Harrisburg, the state capital of Pennsylvania, was scheduled to default on a 3.3 million dollar bond payment yesterday.
Nervousness that Greece will miss its late March bond payment deadline could curb risk appetite for investors in coming weeks.
The credit rating is a measure of how trustworthy sovereign bonds are, or how much you can rely on governments to deliver on the promise of payment that a bond represents.
The settlement terminates credit default swaps Morgan Stanley purchased from MBIA to protect holdings of commercial mortgage-backed securities and resolves the pending litigation between the two and will see an undisclosed cash payment from the bond insurer to the bank.
FORBES: Morgan Stanley Settles MBIA Suits, Will Take $1.8B Hit
Here's the thing: if the Greek government were to miss a payment on a bond as it fell due, the immediate impact on the finances of the Greek government would be considerably less than the trauma that such a default would cause for the international banking system.
If Greece were to miss a payment of interest or principal on a Greek bond, creditors could sue for the missed payment.
In the case of insured bonds, where the interest payment is funded by a bond insurer or letter of credit issuer, the default is still the same.
FORBES: Even If A Bond Doesn't Default, You Can Still Lose Your Money
Former Livi director Ged Nixon, who is currently head of supporters' group 'Livi for Life', is the third member of the consortium who will give the SFL a number of assurances, chiefly the payment of a "substantial" bond and a commitment to fulfil the club's fixtures this season.
It is calculated by dividing the annual coupon payment by the par value of the bond.
He asked about the annual schedule for interest payments and the broker responded with the dates from the bond, noting that no payment would be made for 12 months in the first year.
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So in theory if cross-default or accelerated payment clauses were unexpectedly to turn up in bond documentation, the Greek parliament could legislate to make them null and void.
Also, with the bond you know in advance your 2027 termination payment.
In addition, the mere incorporation of biometrics into the payment system is likely to deter criminals, says Mike Bond, an expert in banking security at Cambridge University.
Credit (a loan or a bond) is not generally acceptable as a means of payment.
But there seem to be no clauses in the prospectuses for Greek government bonds that would trigger accelerated payment of the rest of what's owed on any particular bond in default or that would put other bonds into default: in the jargon, there are no accelerated payment or cross-default clauses.
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