Greek banks will decide on Friday whether to take part in a bond buyback that is crucial for the country’s debt sustainability, two banking sources told Reuters on Wednesday.
Greek banks’ participation is key for the success of the plan, under which Athens aims to spend 10 billion euros of borrowed money to buy back bonds far below their nominal value, thus cutting its debt by a net 20 billion euros.
Greek lenders, which hold an estimated 17 billion euros of bonds out of the 63 billion eligible for the buyback, are expected to take part in it because they depend on bailout funds that Athens stands to receive after successful completion of the buyback.
“All banks will hold management board meetings on Friday,» one senior banking official told Reuters on condition of anonymity. A second official confirmed this. Both declined to say whether lenders would take part in the plan.
Friday is the last day in which Greece will accept investors’ bids. On Thursday, senior Greek bankers will meet finance minister Yannis Stournaras to discuss the plan. Stournaras said last week it was Greek banks’ «patriotic duty» to make sure the buyback succeeds.
Despite the better than-expected terms Greece offered on Monday, some analysts said it remained to be seen whether the buyback would be successful.
The range set by Athens varied from a minimum of 30.2 to 38.1 percent and a maximum of 32.2 to 40.1 percent of the principal amount, depending on the bond maturities of the 20 series of outstanding bonds.
The bond buyback is part of a broader debt relief package worth 40 billion euros, agreed by Greece’s euro zone and International Monetary Fund lenders late last month.