Greece extends debt buyback offer
Greece announced it had extended until Tuesday a debt buyback offer
on which depend IMF-EU bailout funds to avert impending bankruptcy after
having apparently fallen short of its target amount.
“We have decided to extend the invitation to offer designated
securities for exchange to 11 December 2012,” the head of Greece’s PDMA
debt management agency, Stelios Papadopoulos, said in a statement on
Private holders of Greek sovereign bonds originally had to submit by
Friday their offers to participate in the buyback, which offered them
32.2 to 40.1 percent of the face value of the securities.
The PDMA statement said they now had until 1200 GMT on Tuesday to
submit bids to participate in the buyback, which aims to cut Greece’s
debt by about 20 billion euros ($26 billion) and is vital to qualify for
more financial aid from the European Union and International Monetary
According to Greek media, the offer was extended as the target of 30
billion euros in bonds tendered had not been achieved.
Greek business daily Naftemboriki said the offers totalled about 27
billion euros. The financial website Capital.gr said the decision to
extend the offer was made after consultations Sunday with eurozone
“The operation is already a success,” but the state “is trying to
fully reach its target, and maybe even surpass it,” said Costas Melas,
an international finance professor at the University of Athens.
Manos Hadzidakis at the Beta financial house said the buyback had
proceeded “very positively” so far, putting the participation of foreign
investors at nearly 16 billion euros out of a total of 25 billion.
He said it would be the participation of Greek banks that would
determine whether the target is reached.
The head of the PDMA warned investors that any future offers to buy
back debt may not be as advantageous.
“Future measures may not involve an opportunity to exit investments
(Greek sovereign bonds) at the levels offered for this buyback,”
The IMF and the eurozone have agreed to release 43.7 billion euros in
rescue loans in four instalments to enable Greece to avoid bankruptcy
provided Athens carries out the bond buyback.