Greece says voluntary debt buy back must succeed

Wed Nov 28, 2012 11:08am EST
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By Lefteris Papadimas and Harry Papachristou

ATHENS (Reuters) - Greece's debt buyback plan, a key element of the cash-strapped country's bailout deal, will be voluntary but must succeed, Finance Minister Yannis Stournaras said on Wednesday.

In his first major news conference since a deal earlier this week to shave about 40 billion euros off the country's debt pile, Stournaras said the offer would be attractive to bond holders.

But he declined to give details.

"The buyback must succeed. It's our patriotic duty to succeed, it is important for the country's credibility," he said.

Greece must conduct the deal by December 13, before it receives more than 30 billion euros in withheld bailout payments from the euro zone and the International Monetary Fund (IMF).

According to ministry officials, Greece might spend around 10 billion euros from the euro zone's rescue fund EFSF, which would allow it to buy around 30 billion euros worth of debt, cutting its outstanding obligations by around 20 billion euros.

Deutsche Bank DKBGn.DE will be the lead manager of the operation, working together with Morgan Stanley (MS.N: Quote) as deal manager, a senior finance ministry official told Reuters earlier on Wednesday.

But private sector analysts have raised questions over whether it would attract enough interest from bondholders to deliver the promised savings and how it would be funded.   Continued...

Greece's Finance minister Yannis Stournaras arrives for a news conference in Athens November 28, 2012. REUTERS/Yorgos Karahalis