Creditors give hope to Greece

ATHENS

Police officers protest against their pension fund’s participation in the Greek bond swap in Athens yesterday. REUTERS photo

Key creditors holding a bloc of more than 39 percent of privately held Greek debt said yesterday they would take part in a bond swap, a condition for an overall bailout to save Greece from default. 

The announcement came only one day before today’s deadline for Greece to finalize swaps, raising the likelihood that the deal will go through and a 130 billion euro international bailout package would be secured. 

Thirty companies on the Private Creditor-Investor Committee that helped negotiate the deal said they “intend to participate in the debt exchange” with bonds amounting in aggregate to 81 billion euros, or 39.3 percent of the 206 billion euro total eligible debt. 

Athens, totally reliant on international support to stave off bankruptcy, has asked its private sector creditors to accept steep losses on their Greek bond holdings as it fights to cut a public debt burden of 160 percent of gross domestic product. 

Banks, insurers, pension funds and others are being asked to give up almost three quarters of the value of their investments in return for new Greek bonds. 

The latest commitments bring the declared total closer to the two thirds minimum level needed for Greece to enforce losses on any holdouts, ensuring the deal goes through. 

After months of tortuous negotiations, many of the big institutional investors had said they would accept the deal, but senior bankers and officials remained cautious ahead of the deadline.