Thursday, March 8, 2012

Greece Moves Closer to Swap

Wall Street Journal
March 7, 2012

Greece moved a step closer to completing its debt restructuring when a raft of bondholders pledged to participate in the swap, likely enabling the troubled nation to force the deal through.

As of late Wednesday, about 52% of the €206 billion ($270.9 billion) in bonds up for restructuring had been pledged.

Portuguese and U.K. banks, as well as Italian insurance companies added their names to the list of holders agreeing to the swap, as did Greek pension funds holding €19 billion of Greek debt.

Thirty-two investors in a group known as the Private Creditor-Investor Committee for Greece have signed on.

The €107 billion so far in pledges, coming ahead of the Thursday deadline, suggest that Greece is well on its way to getting enough creditors to consent to make the deal binding for any that refuse to take part.

The deal replaces existing bonds with a package of new securities with long maturities and less than half the face value. Completion of the swap is needed if the European Union and the International Monetary Fund are to provide €130 billion in new loans to Greece, enabling it to avoid defaulting on its remaining debts.


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