Greece launches formal offer for debt writedown

Greece has issued an official offer for a massive bond swap designed to knock ?107 billion ($142 billion) off its debt held by banks and other private investors.

The Finance Ministry issued a formal offer Friday to banks and other investment funds under which creditors are called on to accept a 53.5 percent loss on the face value of the bonds they hold in return for new bonds with longer maturities.

Success of the deal depends on a high level of participation. It is an integral part of the second international bailout for Greece, under which the country will receive ?130 billion ($174 billion) in rescue loans in return for further harsh austerity measures. [AP]