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Greece to begin bond buyback plan

Athens - Greece will launch a bond buyback programme agreed with EU and IMF creditors “early next week”, Greek Finance Minister Yannis Stournaras said on Wednesday.

“The success of the operation is a patriotic duty, it is a question of credibility” for Greece, Stournaras said, while adding that the government had an alternative plan in case the operation, meant to be completed by December 13, failed.

The scheme, tied to the latest rescue package for Greece, is expected to involve the voluntary purchase of debt bonds issued by Greece and held by private creditors, the source said.

The value of Greek bonds has plunged in value as the debt crisis has risen in intensity and since a big debt write-off by private bondholders at the beginning of the year.

By buying back debt at a heavy discount, Greece reduces the total burden of debt.

Analysts at the Greek bank Eurobank said they expected the operation to involve the purchase, at a discount, of half the debt totalling 62.3 billion euros still held by private creditors.

In March, Greece's private creditors already agreed to write down debt of about 107 billion euros.

Under the terms of the complex package of measures agreed in Brussels early on Monday, the International Monetary Fund and the eurozone agreed to release 43.7 billion euros ($57 billion) in four instalments from the middle of December to March to enable Greece to avoid bankruptcy towards the end of the year. - Sapa-AFP

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