With the backing of its own banks, Greek officials said they met a target to buy back 30 billion euros ($38.96 billion) of bonds held by investors, goal international lenders set to trigger the release of long-delayed 34.4 billion euros ($44.68) billion series of additional rescue loans.
The deadline of Dec. 7 was pushed back to Dec. 11 because the participation fell short, but Greek banks, reacting to calls from Finance Minister Yiannis Stournaras to accept a “patriotic duty” to join even if it meant losses to shareholders, pushed the drive over the top, officials said, with enough investors agreeing to reach a total of 31.5 billion euros ($40.9 billion).
State-run TV NET and the Reuters news agency said that officials had determined by mid-day on Dec. 11 that the plan was successful. A senior Greek bank executive told Reuters that local lenders have contributed almost all of the bonds they had had held back from the initial round of offers last week.
The Greek bands had tendered only about 10 billion euros ($12.98) of roughly 17 billion euros ($22.07 billion) in Greek bond holdings by the original deadline, hoping that the rest would be made up by notes submitted by hedge funds. In a bid to get more board, the government said it would hold them harmless against possible lawsuit from shareholders.
The plan means that Greece will have to pay only 10 billion euros ($12.98) for the bonds and be able to write down its debt by 20 billion euros ($25.96 billion) the benchmark set by the Troika of the European Union-International Monetary Fund-European Central Bank (EU-IMF-ECB) which was holding back further loan installments.
Eurozone finance ministers were to hold a teleconference to discuss the bond buyback program and are expected now to release the bailout monies when they meet on Dec. 13.
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