Wednesday, March 7, 2012

Investors help Athens over bailout hurdle

Financial Times
March 7, 2012

Private investors holding more than €100bn in Greek bonds have declared publicly they will participate in Greece’s huge debt restructuring, clearing a key hurdle that makes it likely that history’s largest sovereign default will proceed as planned.

The announcements by owners of more than half of all privately held bonds – including some of Europe’s largest banks and most Greek government pension funds – overcome the first threshold needed for Athens to impose the deal on holdouts.

The total received a boost on Wednesday when a consortium of 32 European banks declared they had commitments totalling €84bn, or about 41 per cent of the €206bn now in private hands. Commitments from Greek pension funds and other government-controlled entities pushed the total above €100bn.

All private holders of Greek bonds must declare their intention by Thursday night. Officials expressed increasing confidence that, though a variety of coercive tools, they would get 95 per cent of bondholders to participate, the total necessary for the new €130bn Greek bailout to proceed.

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