Succes in buyback eases EU concerns

ATHENS - Reuters

Greek Prime Minister Antonis Samaras. AP Photo

Greek and foreign bondholders offered the targeted 30 billion euros ($38.8 billion) in a debt buyback that is key to the country’s international bailout, a Greek government official said on Dec. 8, suggesting the plan had broadly succeeded.

The plan is central to efforts by Greece’s euro zone and International Monetary Fund lenders to cut its debt to manageable levels and unlock more than 30 billion euros of rescue loans the country badly needs later this month. It accounts for about half of a broader, 40-billion euro EU/IMF debt relief package for Athens agreed in November.

Under its terms, Athens will spend up to 10 billion euros of borrowed money to buy back bonds with a nominal value of about 30 billion euros.

Since the bonds are to be bought far below their nominal value, the country’s net debt burden would fall by about 20 billion euros.