Enough private investors have agreed to take huge losses on their Greek bonds, enabling a debt swap deal to go forward, a government source says, clearing a key hurdle for a new bailout package for Greece.
As bondholders continued to decide whether to swap their Greek debt at a steep loss ahead of a 2000 GMT deadline, a government source said participation had already exceeded 75 per cent, the minimum level sought by Athens for the deal to go through.
Talk that the level was close to being reached trickled out throughout the day, helping send stock markets sharply higher across the globe and giving leaders some confidence that a page was about to be turned.
Italian Prime Minister Mario Monti said over 60 per cent of private creditors had accepted the debt swap and the global bank association that led the initiative said a deal was close at hand.
“I’m optimistic that there’s going to be an agreement in the next few hours,” managing director of the International Institute of Finance (IIF) and chief negotiator for the banks involved in the debt writedown Charles Dallara said.
The swap is designed to erase more than €100 billion ($A124.7 billion) from Greece’s near and midterm debt and replace it with new maturities.
Read More: Greek bond swap deal to go ahead