Greece sees debt buyback, PSI as most likely options

Reuters
July 14, 2011

Greece sees a buyback of Greek bonds by a euro zone bailout scheme and private sector involvement (PSI) in exchanging bonds as the two most likely solutions to its crisis, Greek newspapers reported on Thursday.

Citing anonymous government sources, newspapers Ethnos, Eleftherotypia and Eleftheros Typos said that the government was focusing on these options following a meeting of Prime Minister George Papandreou with some of his most senior ministers.

One of the most likely options in the eyes of the Greek government is using the European Financial Stability Facility (EFSF) to buy back bonds worth 15 to 40 billion euros at a discount of 30 percent, Eleftherotypia and Eleftheros Typos said.

The Greek government estimates that this would reduce its debt burden by at least 20 percent without creating complications with credit rating agencies, they added.

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