Greece has seen investors? participation in a massive debt relief deal rise, bringing the country closer to avoiding a default that would plunge it into financial chaos and re-ignite the European debt crisis.
About 24 hours before the deadline for acceptances, investors owning around half of Greece?s privately-held debt had committed publicly to the bond swap, in which they will accept losses to avoid facing even bigger ones in the event of an outright default by Athens.
For the deal to work ? and for Greece to secure a related 130 billion euros ($A162 billion) bailout ? Greece needs 90 per cent of investors to sign up. However, a voluntary participation rate of around 70 per cent could be enough to force most holdouts to go along.
Greece?s financial troubles are the epicentre of Europe?s two-year crisis, so successfully lightening its debt load is crucial to the overall plan of keeping the 17-nation euro currency afloat. The euro and stock markets rose on Wednesday as confidence over the bond swap grew.
The Institute of International Finance, which has been leading the debt talks for large private creditors, said firms holding 84 billion euros of Greek bonds have agreed to the deal.
The 32 firms include 12 that declared their participation on Monday as well as all major Greek and Cypriot banks. German reinsurer Munich Re, which holds some 1.6 billion euros in Greek bonds, also said it will participate.
On top of that, some 14 billion euros in bonds owned by Greek investment funds but managed by the central bank will also agree to the swap, Finance Minister Evangelos Venizelos said. Greek officials are hopeful that funds that directly manage another three billion euros in bonds would also sign up.
After the latest announcements, officials in Athens and other European capitals sounded optimistic that they will get the necessary participation to make the deal work
Tags: Debt Relief
Source: http://freedom-debtrelief.net/debt-relief-greek-bond-swap-gains-momentum/
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