BUSINESS

Greece to pay May 15 bond

Greece will pay the remaining holders of a bond that matures on May 15, avoiding default on the first issue to expire after the biggest sovereign debt swap in history, a government official said on Tuesday.

Greece completed a huge debt restructuring in early March, swapping a nominal amount of 177 billion euros ($227.23 billion)of government paper held by private creditors for new securities as part of its second rescue package.

A few investors held out, however, rejecting the swap offer accepted by 96.9 percent of bondholders who suffered a real loss of 75 percent. That left about 6 billion euros' worth of bonds that the Greek government must decide how to handle.

The May 15 Hellenic Republic note was partially exchanged under the swap, with a remaining amount of 430 million euros to be serviced. It pays a coupon based on three-month Euribor +8 basis points.

"The bond will be paid,» the official, who did not want to be named, told Reuters.

The official did not say why the government had decided to repay the bond or what Greece would do for remaining holdouts on other bonds. [Reuters]

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