More investors agree to Greek debt swap

More lenders in the private sector have agreed to a Greek debt swap deal which could determine if the Mediterranean nation can stay in the euro, reports the BBC.

The banking group heading the negotiations said 39.3 per cent of bondholders have signed up to exchange their Greek government bonds for new debt. However, 75 per cent is the overall figure needed to ensure the deal is passed. The deal is one of the conditions for the country’s new bailout and if it is not clinched it would likely result in a debt default.

Investors have been given until 2000 GMT tomorrow to sign up for the debt swap. Stocks tumbled on Tuesday due to concerns that a large number of investors would not agree to the deal. The Institute of International Finance said on Wednesday that just below 40 per cent of the outstanding Greek debt’s private holders had agreed to sign up.

Private sector bondholders, including banks and pension funds, have to agree to a cut of 53.5 per cent in the 206bn euros of Greek bonds which they hold by the deadline tomorrow. In addition, 75 per cent of creditors have to agree in order for the deal to go ahead.