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Greece Extends Buyback Deadline To Meet Target


Greece extended the deadline for the buyback of debt by one day, after initial offers fell short of target last week.

According to a statement from the Public Debt Management Agency (PDMA), the new deadline will be December 11. The invitation will expire on London time 12:00 p.m. on Tuesday. The earlier deadline was on December 7.

"Holders that have not tendered so far can still take advantage of the liquidity opportunity offered by the Invitation," Stelios Papadopoulos, the head of the PDMA said.

Debt buyback was set as precondition by the creditors to approve next tranche of aid as it will lower the nation's huge debt. Eurogroup is widely expected to make a final decision on Greece funding at its next meeting in Brussels on December 13.

Standard and Poor's last week lowered Greece credit rating to 'selective default' saying that the government's invitation to private sector bond holders to buyback debt amounts to a selective default. The agency argued that the offer implies that the investor will receive less value than the promise of the original securities.

The country plans to buyback bonds with a face value of about EUR 30 billion to improve its debt profile. Greek media reports suggest that Athens last Friday received as much as EUR 27 billion in offer.

Buyback went "very well", Prime Minister Antonis Samaras told reporters on Sunday in the German province of Bavaria.

Under the plan announced on December 3, Greece would spend EUR 10 billion to buy back its bonds. They will be paid in six-month bonds from the European Financial Stability Facility, or EFSF.

The buyback will be conducted through a modified Dutch auction. Under the modified Dutch auction procedure, Greece has the sole discretion to determine the principal amount of each series of designated securities, its purchase price and the principle amount of EFSF notes the country intends to deliver in exchange for the designated securities.

The expected settlement date for the offers also has been extended by one extra day to December 18.

by RTTNews Staff Writer

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