Debt swap for bonds under Greek law complete

Greece has completed an exchange with private investors for bonds issued under Greek law, part of a historic debt writedown to erase nearly a third of its debt, the debt management agency said on Monday.

“The Hellenic Republic today announced that it had completed the exchange» of over some 177.3 billion euros governed by Greek law, the agency said.

Greek debt holders received new bonds with a face value equivalent to 31.5 percent of the face amount of the debt exchanged, plus 24-month notes from the European Financial Stability Facility, the eurozone’s current rescue fund.

Holders also received detachable securities linked to Greek output with a notional amount equal to the face amount of the new bonds.

“By delivering the consideration described in the invitations, the Republic discharged in full its obligations to the holders of amended Greek-law governed bonds,» the debt agency said.

Another exchange for bonds issued under international law is to take place on April 11.

The Greek bond swap is intended to avert default by Greece when debt falls due on March 20 and is a key part of a eurozone-IMF rescue to enable the country to rebuild its economy.

A broad majority of investors on Friday accepted to lose 53.5 percent of the face value on the 206 billion euros ($273 billion) of privately-held Greek debt.

Collective action clauses recently included into Greek law enabled Athens to force compliance on additional bondholders, pushing the overall participation rate to 95.7 percent.

The exchange reduces the near and midterm debt owed by Greece by over 100 billion euros. Greece has a total public debt of over 350 billion euros.

Ratings firm Moody’s declared Greece in default on its debt and a key derivatives group branded the deal a «credit event», but Athens argues that repayment of default securities will be negligible.


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.