Greece debt buyback gets offers of $39.7bn

Written By Unknown on Rabu, 12 Desember 2012 | 18.59

GREECE says it has attracted offers worth 31.9 billion euros ($A39.75 billion) under a debt buy-back scheme tied to the release of EU-IMF bailout funds needed to avert bankruptcy.

But the country's debt management agency said to complete the procedure, it would need 11.29 billion euros in funds from the European Union's EFSF rescue fund overall, 1.29 billion euros more than was originally allocated for the operation.

"The aggregate principal amount of EFSF notes expected to be delivered is 11.29 billion euros," the agency said in a statement, adding Greece had "advised its official sector creditors" over the issue.

"Approximately 31.9 billion euros...will be exchanged and transferred to (Greece) pursuant to the invitation," the agency said, adding it had offered a weighted average price of 33.8 cents per euro to debt-holders, or 33.8 per cent.

Private holders of Greek sovereign bonds originally had to submit by Friday their offers to participate in the buyback, which offered them 32.2 to 40.1 per cent of the face value of the securities.

But the operation was extended to Tuesday, reportedly to achieve higher offers from Greek banks.

Greek stocks opened with small gains on Wednesday but the main index fell into the red as the announcement was made.

The buy-back aims to cut Greece's debt by about 20 billion euros and is vital to unblock pending loans from the European Union and International Monetary Fund, which were frozen earlier this year owing to reform delays.

The IMF and the eurozone have agreed to release 43.7 billion euros in rescue loans in four instalments to enable Greece to avoid bankruptcy provided Athens carries out the bond buyback.

Part of that money, an amount of 34 billion euros, is urgently needed to recapitalise Greek banks which took part in a previous operation to write-down another part of the country's debt in the spring.


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