Kathimerini: Greece completes buyback, looks to next loan tranche

11 December 2012

Greece completed its bond buyback programme on Tuesday, accepting tenders for €31.8 billion worth of government paper and clearing the way for the disbursement of the country's next, long-awaited bailout tranche.

Greece is borrowing €10 billion to execute the buyback, with the aim of reducing its public debt by €21.1 billion. The average offer to buy back the bonds is 33.8 per cent of the principal amount, which means that Greece needs to spend €11.2 billion in total. It is not clear where the extra €1.2 billion will come from.

Greece’s lenders had estimated that the country’s debt would be reduced by 11 per cent but in fact the difference will be less than 10 per cent.

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