Gov?t issues bond rollover threat

Athens wrote to its eurozone peers on Friday suggesting that it would not proceed with the debt swap plan that is essential for its second bailout package unless it secures the participation of at least 90 percent of holders of its bonds in the private sector.

The threat from the Greek Finance Ministry came in the wake of estimates that private sector participation — amounting to no more than 70 percent at the moment — in the rollover plan agreed by the eurozone on July 21 could be facing delays.

A senior banker suggested on Friday that the letter was meant to be an invitation to banks to declare by September 9 their non-binding interest in the bond swap. ?After September 9 there will be a formal invitation to declare binding interest to participate, by early October,? he told Reuters.

However, the threat to scrap a debt exchange will probably not trigger derivatives insuring the nation?s bonds because the offer is still voluntary, according to David Geen of the International Swaps