Greece’s exchange of private investor bonds complete: bank


ATHENS–Greece has completed an exchange with private investors for bonds issued under Greek law, part of a historic debt write-down to erase nearly a third of its debt, a Greek banking source said on Monday. “The Bank of Greece has sent out the official list of new bonds, trade has begun anew,” the banking source told AFP, completing an operation which had begun earlier in the day. Monday’s swap involves most Greek bonds earmarked for write-down, with another exchange for bonds issued under international law to take place on April 11. The Greek bond swap is intended to avert default by Greece when debt falls due on March 20 and is a key part of a eurozone-IMF rescue to enable the country to rebuild its economy. A broad majority of investors on Friday accepted to lose 53.5 percent of the face value on the 206 billion euros (US$273 billion) of privately-held Greek debt.

Collective action clauses recently included into Greek law enabled Athens to force compliance on additional bondholders, pushing the overall participation rate to 95.7 percent. The exchange reduces the near and midterm debt owed by Greece by over 100 billion euros. Greece has a total public debt of over 350 billion euros. Ratings firm Moody’s declared Greece in default on its debt and a key derivatives group branded the deal a “credit event,” but Athens argues that repayment of default securities will be negligible.