Buyback deadline extension to woo more participants

Athens announced on Monday an extension to the deadline for bondholders to take part in the debt buyback scheme until Tuesday afternoon, while the tug of war between Germany and the International Monetary Fund over Greece’s debt continues, focusing on the amount of funds Greece should have at its disposal for the buyback scheme.

The Public Debt Management Agency (PDMA) extended the deadline for offers to enter the scheme until 2 p.m. on Tuesday.

The Eurogroup of eurozone finance ministers will hold a conference call on Tuesday to discuss the course of the debt buyback, ahead of the council’s meeting on Thursday, Guy Schuller, a spokesman for the Luxembourg government of Jean-Claude Juncker, who chairs the group’s meetings, stated on Monday.

The new PDMA head, Stelios Papadopoulos stated that “investors will have to bear in mind that even if Greece accepts all the bonds offered in response to the invitation of interest, it will continue to cooperate with its official creditors in examining further measures to set its debt on a sustainable course.” In essence, he told foreign hedge funds and banks that there will be no better offer than the current one and there may be a new intervention as regards Greece’s debt in due course.

“There is some scope for additional participation by international and domestic investors in the Greek bond buyback program,” Simon O’Connor, a European Commission spokesman, commented on Monday.

The target set for the program is for a reduction of the country’s debt by some 20 billion euros. For that to happen, the Eurogroup has approved funds of 10 billion euros, expecting the bondholder participation to add up to 30 billion euros.

Sources said that before the extension was given the offers had amounted to 26.3 billion euros and the average buyback price stood at around 33 percent. Greece would then need over 9 billion euros, lightening its debt by just over 17 billion euros.

The extension would see Greek banks raise their participation by 5 billion euros, but it appears that the 10 billion set aside will not suffice.

That is the bone of contention between Berlin and the International Monetary Fund, with Germany being against increasing funds to Athens for the scheme, as the IMF wants the eurozone’s biggest economy to do.

Subscribe to our Newsletters

Enter your information below to receive our weekly newsletters with the latest insights, opinion pieces and current events straight to your inbox.

By signing up you are agreeing to our Terms of Service and Privacy Policy.