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Six banks OK Greece deal

Wed., March 7, 2012

ATHENS, Greece – Greece’s six largest banks have agreed to participate in a crucial bond-swap deal, the government said Tuesday, in a boost for the struggling country as a deadline for the landmark agreement looms.

The Finance Ministry said the six banks have already agreed to participate or would recommend participation at board meetings today and Thursday. Though Greece still needs many more creditors to sign up by the Thursday deadline, the inclusion of some of the big banks is a relief for officials and potentially persuasive for smaller bondholders.

The bondholders will lose 53.5 percent of the face value of their debt – and around 75 percent in real terms – in exchange for new bonds with longer repayment deadlines and lower interest rates.

The bonds deal is vital to avoid default later this month and aims at cutting more than $139 billion off the country’s national debt.

The deal depends on near full participation by creditors, but if a large number agree to take part it can force any holdouts, and more interest is likely to come at the last minute. A dozen international banks had already signaled they would participate.

The ministry statement did not name the Greek banks involved in the talks, but a government official later confirmed that they were National Bank, Eurobank, Alpha Bank, Piraeus Bank, ATE Bank and Postbank.


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