Greek €135bn debt swap in the balance

Financial Times
September 9, 2011

Greek bankers said on Friday they expected the country’s debt managers to achieve an 80 per cent participation rate in a €135bn debt swap and rollover included in the country’s second international bail-out package.

The deadline passes on Friday for banks and other large investors in Greek government debt to take part in the so-called private sector involvement, which involves them taking losses of about 21 per cent on their bonds maturing by 2020.

Although Greece has threatened to withdraw the deal unless it gets a 90 per cent participation by investors, an 80 per cent rate would be a high enough rate for the government to go ahead, according to analysts.

“The current estimate is that 75 per cent of investors have signed up already and we’re confident it will reach 80 per cent,” one banker said.

Another said:”Two Greek state-controlled banks with sizeable bondholdings have not yet made clear what they’ll do but it’s unlikely they will stay out.”

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