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Greece to announce bond buyback results Wednesday

Published on NewsOK Modified: December 11, 2012 at 5:47 pm •  Published: December 11, 2012

That is expected to increase with the submission to Parliament Friday of a new tax bill incorporating many of Greece's latest austerity commitments, including a 15 percent tax on bank deposit earnings. The presentation will be delayed by three days to ensure its approval by the two small center-left parties in Prime Minister Antonis Samaras' uneasy conservative-led coalition.

The initial deadline for investors to declare interest in the buyback plan has been extended from last week, to encourage the biggest possible participation. The deal is hoped to shave some €20 billion off Greece's €340 billion national debt load.

Athens can use up to €10 billion in European funds to rebuy about half its privately-held debt at a third of its nominal value. The proposal should be attractive to many investors, as the average price was higher than the market value of its bonds when the offer was announced, and some daring bondholders who bought during the summer could see their initial outlay triple.

Although the country is frozen out of long-term bond markets, it maintains a market presence with regular sales of short-term debt. The T-bills are mostly taken up by the liquidity-starved domestic banks that need them as collateral for their own borrowing needs.

Earlier Tuesday, Athens raised €4.4 billion ($5.7 billion) in auctions of one-month Treasury bills — an unusually short-term issue which Greece has resorted to twice in as many months — and six-month paper.

In both cases, the yields were not significantly changed from the previous auctions of the same maturity.