Greece launches program to buy back some of its debt

PanARMENIAN.Net - Greece has launched a program to buy back some of its debt, which is a condition of it receiving the next tranche of its bailout loans, BBC News reported.

The government will offer to buy back 10bn euros ($13bn) of its bonds from private investors for between 32% and 40% of their face value. They will be paid in six-month bonds from the European Union's EFSF rescue fund.

The operation will reduce the face value of Greece's debt.

Private investors have until Friday, Dec 7 to sign up to the scheme and the deals are due to go through on Dec 17.

It will be structured as a Dutch auction, under which the first creditors to apply get the best returns.

Private creditors agreed in March to write off about 107bn euros of Greek government debt and many banks and insurance companies had officially given up hope of receiving any of the rest of their money back.

If the operation is successful, it will open the way for Greece to receive the next tranche of its bailout, which will be worth about 44bn euros, on Dec 13.

Greece has been waiting since June for the loans, to help its heavily indebted economy stay afloat.

The payment of the loans was finally agreed last week at a meeting of eurozone finance ministers and the International Monetary Fund.