Greek banks seen topping up bids to meet buyback target

Tue Dec 11, 2012 8:28am EST
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By George Georgiopoulos and Lefteris Papadimas

ATHENS (Reuters) - Greek banks are expected to have tendered most or all of their Greek sovereign debt by Tuesday's deadline, bankers said, suggesting Athens has hit targets under the bond buyback scheme needed to cut debt and unlock aid.

Athens gave bondholders until 7 a.m. EDT on Tuesday to tender Greek debt under the scheme after the amount offered by Friday's initial deadline fell short of the targeted 30 billion euros.

The cut-price buyback's success is crucial to putting Greece's debt back on a sustainable footing, which in turn allows lenders to disburse aid to Athens.

Greek banks, who had only tendered about 60 percent of their roughly 17 billion euros in sovereign debt holdings by Friday, offered all or most of their holdings to ensure the buyback hits its targets, senior banking executives told Reuters.

"Greek banks have contributed almost all of the bonds they had left," a senior bank executive said minutes after the 7 a.m. EDT deadline passed, adding Athens had probably got offers for as much as 31.5 billion euros.

That is well above the 26.5 billion euros that a senior euro zone official told Reuters had been tendered as of Friday, at an average price of 33.4 percent of face value. <ID:L5E8NA6DV>

A second banker said his bank had offered the rest of its sovereign debt, and that other Greek banks had tendered all their holdings, so that Athens was offered an additional 4.5 to 5 billion euros in debt.

A third banker also estimated total offers represented debt worth about 31 billion euros.   Continued...

An elderly man walks outside the Bank of Greece in Athens November 9, 2012. REUTERS/Yorgos Karahalis