Greece says Bond Swap Agreement is Secured With Lenders

Posted March 9th, 2012 at 2:10 am (UTC-5)
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Greece says the majority of the country's private lenders, including financial institutions, have agreed to a bond swap deal to help it eliminate a $142-billion debt and avoid a default on its financial obligations later this month.

Greece intends to use legislation to force the remaining holdouts to sign on to the agreement.

Greece has adopted widespread austerity measures, cutting wages and pensions and eliminating thousands of government jobs, to meet the demands of international lenders so it could secure a new $172-billion bailout. It is the country's second rescue package in two years.

With Greece planning to pay back the remaining debt it owes to the financial institutions over an extended period, those that bought the Greek bonds will ultimately lose about three-fourths of their investments.

Five small Greek pension funds holding about one percent of the bonds eligible for the write-down have rejected the deal, as have several investment funds and Germany's best-selling newspaper, Bild.