The euro and oil prices are both on the rise as signs appear positive that Greece's bond swap deal will be successful. The deal seeks to slice more than 100 billion euros from the beleaguered nation's deficit.
Early signs for the Greek bond swap deal were promising, according to the government, with the deadline for the deal approaching on Thursday night. Investors had until 8 p.m. UTC to sign the deal which would have private investors swap 206 billion euros ($273 billion) worth of Greek bonds for new ones with 53.5 percent lower face value, lower interest rates and longer maturity dates.
An official told the Associated Press news agency that participation had already passed the 75 percent mark in the deal on Wednesday night.
Athens has stated that participation in excess of 90 percent would be the milestone that determined the success or failure of the deal. With more than 75 percent participation, however, the government can initiate legislation forcing non-participants to go along.
"Obviously for the majority of bondholders it does make sense to accept the deal as it is better to get something rather than nothing and if the exchange failed and Greece undertook a disorderly default then the likelihood is that nothing is close to what bondholders would recover," Gary Jenkins, managing director of Swordfish Research, told the AP.
Markets performed well based on the news. Brent North Sea crude for April gained 1.85 to 125.97 euros on Thursday. The Athens stock exchange also gained, closing up 3.1 percent, while the euro saw gains of 0.8 percent to 1.32 euros to the US dollar by late Thursday.
Athensis scheduled to announce the results early on Friday. Eurozone finance ministers have planned a teleconference on Friday to discuss how to proceed following the closing of the deal.
sjt/ncy (AFP, AP, dpa)
Comments