Greece averts immediate default, as 80% bondholders agree to bond-swap offer

Greece’s government says over 80% of bondholders have agreed to its bond-swap offer, and that it has agreed collection-action clauses for the rest, in a key development that is expected to help the nation avoid default on its debt obligations.

Greece averted the immediate threat of an uncontrolled default on Friday, winning strong acceptance from its private creditors for a bond swap deal which will eat into its mountainous public debt and clear the way for a new bailout.

Euro zone ministers held a teleconference call and were expected to declare Greece had met the tough terms of the 130 billion euro ($172 billion) rescue, and approve the release of funds which Athens needs to meet heavy debt repayments later this month.

But markets sharply marked down the value of new Greek bonds to be issued to the creditors, reflecting the risk of paralysis after elections expected this spring and doubts about whether Athens can bring its debt to a more manageable level by 2020.

On the streets of Athens, some Greeks denounced the deal as a sham that would impose more crippling austerity on a people already enduring pay and pension cuts and soaring unemployment.

However, Finance Minister Evangelos Venizelos hailed the swap - which the European Union and IMF had demanded in return for the country's second bailout since 2010 - as marking a long-awaited success for all Greeks enduring a painful recession.

"Today, after a very long time, is a very good day (for Greece) as well as for me personally," he told parliament, saying the deal had cut its debt burden by 105 billion euros.

"I hope everyone will realize, sooner or later, that this is the only way to keep the country on its feet and give it the second historic chance that it needs," said Venizelos, who led often ill-tempered negotiations with the European Union and International Monetary Fund on the bailout.
(Reuters)