International banks and insurers threw their weight behind plans to help Greece on Friday and said there was broad support to roll over sovereign bonds and reinvest in the country over a longer period or buy back debt.
A small number of options were being discussed, the Institute of International Finance (IIF) lobby group said, with the aim of providing «significant cash-flow support to Greece» on a voluntary basis.
“The private financial community is ready to engage in a voluntary, cooperative, transparent and broad-based effort to support Greece,» the IIF said in a statement.
“Options will include a roll-over or extension of maturities and the re-investment of creditor claims into long-dated instruments with principal collateralization,» it said, adding that it was important to consider debt buyback proposals to reduce debt.
The IIF is playing an informal role coordinating international banks to reach consensus about private-sector involvement in a bailout of debt-ridden Greece.
The IIF represents over 400 financial firms and was created in 1983 in response to the international debt crisis and aims to help stabilize the industry, including managing sovereign risk.
Among those supporting its Greek statement were BNP Paribas, Deutsche Bank, HSBC, ING, Societe Generale, Commerzbankand insurers AXA and Allianz, a person familiar with the matter said.
French banks, the most exposed to the Greek debt crisis, reached an outline agreement to roll over holdings of maturing Greek bonds this week, as part of a wider European plan to avoid sovereign default.
The private sector is expected to contribute 30 billion euros to Greece’s rescue efforts, and France has put forward a plan whereby bondholders would invest at least 70 percent of the proceeds from bonds maturing between now and the end of 2014 into new 30-year Greek debt.
Banks and insurers may fall short of the target if Germany’s planned 2 billion euro private sector contribution is a gauge, however, some industry sources and analysts said.