Greece sticks to buyback plan, says will shield banks

Fri Dec 7, 2012 5:45am EST
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By Karolina Tagaris

ATHENS (Reuters) - Greece says it is sticking to plans to close its offer to buy back its own bonds from investors on Friday in a deal that should meet a debt writedown target set by its international lenders.

The government said it would shield the country's banks from any lawsuits over losses booked if they take part in the buyback.

The buyback, part of a broader debt relief package worth 40 billion euros ($52 billion) agreed by Greece's euro zone and International Monetary Fund lenders last month, is central to efforts to bring its debt to manageable levels.

Athens has no plans to extend the deadline for bids beyond Friday, finance ministry officials said, dismissing a Greek newspaper report suggesting the government could extend the deadline to early next week.

"The process will close today and there is no need for an extension," a senior finance ministry official said. A second official confirmed the 12.00 p.m. EST deadline.

Athens aims to spend 10 billion euros of borrowed money to buy back bonds far below their nominal value. It made the offer on Monday on more attractive terms than expected for investors, boosting expectations that enough bondholders will take part to cut national debt by the targeted 20 billion euros.

Greek banks, which hold an estimated 17 billion euros of bonds out of the 63 billion eligible for the buyback, will hold board meetings on Friday to decide whether they will join in.

Finance Minister Yannis Stournaras, who has told banks it was their "patriotic duty" to ensure the scheme is a success, told local radio Athens would include a provision that protects bank boards from lawsuits from shareholders in case of losses.   Continued...

A woman makes a transaction at the automated teller machine (ATM) as another begs outside an Alpha bank branch in central Athens November 29, 2012. REUTERS/John Kolesidis