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Greece confirms debt swap deal success Greece to go ahead with crucial debt swap
(39 minutes later)
The Greek government has confirmed that it has secured sufficient backing for a debt swap deal that will enable it to avoid defaulting on its debts. Greece has said it has received enough backing to push through a debt swap that should enable it to gain its latest bailout.
85.8% of bondholders subject to Greek law agreed the deal, according to the Greek Ministry of Finance. Holders of 85.8% of debt subject to Greek law and 69% of its international debtholders agreed the deal, according to the Greek Ministry of Finance.
Take up was high enough for the government to activate so-called collective action clauses (CAC) bringing total participation to 95.7%. Take-up was high enough for the government to force unwilling investors to consent to the deal.
Athens needed to get 75% agreement to be able to push through the deal.Athens needed to get 75% agreement to be able to push through the deal.
Greece needs to carry out the debt swap before it gets a second bailout from the European Union, European Central Bank and International Monetary Fund. So far the deal involves 172bn euros ($227bn, £143.7bn) worth of debt - with investors taking a total loss of up to 74%.
Only 69% of the minority of bondholders not governed by Greek law agreed the deal. 'Historic endeavour'
The government has extended the deadline for these foreign bondholders to sign up until March 23. Still, only 69% of the minority of bondholders not governed by Greek law agreed the deal - and Greece said it had extended the deadline for these foreign bondholders to sign up until 23 March.
So far the deal involves 172bn euros ($227.04bn, £143.7bn)) worth of debt with investors taking a total loss of up to 74%. Investors are now waiting to see if forcing bondholders to take the deal - or enforcing so-called Collective Action Clauses - will be deemed as a default.
Greece had said it wanted 90% of bondholders, such as banks and pension funds, to agree to take a 53.5% cut in the 206bn euros ($272bn; £172bn) of Greek bonds they hold. But it only requires a 75% take-up to be able to force through the deal. "On behalf of the republic, I wish to express my appreciation to all of our creditors who have supported our ambitious programme of reform and adjustment and who have shared the sacrifices of the Greek people in this historic endeavour," Finance Minister Evangelos Venizelos said.
"Greece will continue implementing the measures needed to achieve the fiscal adjustments and structural reforms to which it has committed, and that will return Greece to a path of sustainable growth."
The European Union and International Monetary Fund have said that if the debt swap does not go through then Greece will not get its latest bailout of 130bn euros.
Economic and Monetary Affairs Commissioner Olli Rehn said earlier this week that there would be no better offer, and the deal was vital for eurozone financial stability.
He said: "It is important that all investors recognise that Europe has committed the maximum funds available to this voluntary debt exchange and that full participation is necessary for the Greek programme to move forward."
The Greek Finance Ministry had made it clear that the alternative to the debt swap is a potential default.
Are you in Greece? What is your reaction to the debt swap deal? Send us your comments using the form below:Are you in Greece? What is your reaction to the debt swap deal? Send us your comments using the form below: