Greece kicked off plans Friday to slash its outstanding debts by more than 50 percent, even as a top credit-rating company warned that aspects of the deal could further destabilize Europe’s government bond markets.
In what the International Monetary Fund has billed the largest debt restructuring ever, the Greek Finance Ministry posted its offer to investors on a Web site set up to manage the massive bond exchange. Under the terms of the deal, existing Greek bonds can be swapped for a new 30-year note worth 31.5 percent of the face value, plus a second short-term security worth another 15 percent that is backed by the entire euro zone and meant to be as good as cash.
Greek officials hope private investors will voluntarily accept a steep write-down in the value of their bond holdings in order to avoid even worse losses if the country were to default.
For more: Greece posts debt offer to investors on Web site - The Washington Post
In what the International Monetary Fund has billed the largest debt restructuring ever, the Greek Finance Ministry posted its offer to investors on a Web site set up to manage the massive bond exchange. Under the terms of the deal, existing Greek bonds can be swapped for a new 30-year note worth 31.5 percent of the face value, plus a second short-term security worth another 15 percent that is backed by the entire euro zone and meant to be as good as cash.
Greek officials hope private investors will voluntarily accept a steep write-down in the value of their bond holdings in order to avoid even worse losses if the country were to default.
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