Athens announced the above today. It was just sufficient to keep the IMF on board so I guess a few arms were twisted as it was privately held bonds that were tendered which includes Greek pension funds, a case of robbing Stellios to pay Stellios you might say. The price was set by what price gave the hedge funds a decent profit. They had bought the bonds when they were junk rated and yielding 25% or so. The hedgies exited with a nice profit but the Greek pension funds took a big hit.
There will be a formal announcement on Monday confirm bonds with a total face value of 30 bn € were bought in for 10 bn€ ie a write down of 65%. IMF funds were being witheld until this deal was done.
Athens has received 148.6 billion euros in EU/IMF funds since May 2010. It stands to get almost 90 billion euros more by the end of 2014.
It will all go the same way. Its called chucking good money after bad. The Greeks have paid a terrible price. Their economy has shrunk by 24% in the last 5 years and unemployment is nearing 30%.
Greek banks also tendered their bonds but then they will receive the EU/IMF funds so it was naked self interest on their part.
The can will roll on and on down the road to Euro exit.