Greece wants extra funds to buy back all bonds offered

Wed Dec 12, 2012 7:40am EST
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By George Georgiopoulos

ATHENS (Reuters) - Greece on Wednesday asked its foreign lenders for extra money to complete a bond buyback that forms part of its bailout, with policymakers and analysts calling the scheme a success even though it narrowly missed its debt reduction target.

The scheme, intended to put Greece's debt mountain on a more sustainable footing and unlock cash to avoid bankruptcy, had a maximum budget of 10 billion euros to buy back bonds trading at a huge discount to their face value of about 30 billion euros.

But Athens had to offer investors a higher-than-expected price, raising the plan's funding needs to 11.29 billion euros if it is to buy all the 31.9 billion euros of bonds that investors offered.

Greece's debt agency said it would buy back the entire sum offered if it got additional financing from its lenders.

"It is a good outcome, despite the need to increase the funding," said Theodore Krintas, head of wealth management at Attica Bank.

"The bottom line is that it reduces debt."

The buyback accounts for about half of a broader debt relief package that lenders agreed for Athens last month, and its success is essential to keeping the International Monetary Fund committed to a rescue plan mounted jointly with the EU.

IMF director Christine Lagarde has already signaled that she is satisfied with the outcome.   Continued...

A woman stands next to an electronic board at the reception hall of the Athens stock exchange December 12, 2012. REUTERS/John Kolesidis