Greek bond buyback a success

A Greek operation to buy back some of the country's huge debt at reduced prices to access additional EU-IMF financial aid has met the 30-billion-euro target set by the authorities, news reports said on Saturday. Financial daily Naftemboriki said foreign debt-holders had offered to sell sovereign bonds worth around 15 billion euros ($19.5 billion) while Greek banks had contributed another 15 billion euros by the required deadline on Friday. Kathimerini daily added that Greece's four main banks -- National Bank, Eurobank, Alpha and Piraeus -- had contributed state bonds worth around 11.5 billion euros. The state management agency is expected to announce initial results from the operation later on Saturday, a finance ministry source said. Greece began the buyback on Monday in a bid to cut the national debt by around 20 billion euros ($26 billion), inviting eligible holders to turn in sovereign bonds for 32.2 to 40.1 percent of their face value. Those who participated were to receive six-month bills issued by the European Union's EFSF rescue fund with up to 10 billion euros available from the fund for the operation. With the value of Greek bonds having plunged in recent years, this money was considered sufficient to buy back debt worth 30 billion euros. About 20 different series of Greek sovereign bonds held by private creditors with a face value of 62.3 billion euros were eligible for the buyback. The operation is tied to the release of 43.7 billion euros in rescue loans from the European Union and the International Monetary Fund. By using newly-borrowed money to buy back its sovereign bonds at a heavy discount, Greece reduces the total burden of debt in what amounts to a refinancing scheme.