ATHENS, Greece — Greece’s six largest banks have agreed to participate in a crucial bond-swap deal, the government said Tuesday, a boost for the struggling country as a deadline for the landmark agreement looms.
The Finance Ministry said the six banks already have agreed to participate or would recommend participation at board meetings today and Thursday. Though Greece still needs many more creditors to sign up by the Thursday deadline, the inclusion of some of the big banks is a relief for officials and potentially persuasive for smaller bondholders.
The bondholders will lose 53.5 percent of the face value of their debt — and around 75 percent in real terms — in exchange for new bonds with longer repayment deadlines and lower interest rates.
The bonds deal is vital to avoid default later this month and aims at cutting more than $139 billion off the country’s national debt.
The deal depends on near full participation by creditors, but if a large number agree to take part, it can force any holdouts, and more interest is likely to come at the last minute. A dozen international banks had already signaled they would participate.
The ministry statement did not name the Greek banks involved in the talks, but a government official later confirmed they were National Bank, Eurobank, Alpha Bank, Piraeus Bank, ATE Bank and Postbank.
Greek banks hold about $59.2 billion of Greece’s total $271 billion privately held debt, with the six largest banks holding 97 percent of that amount, according to IMF estimates.
Continued uncertainty over the Greek deal hit global markets Tuesday, but shares on the Athens Stock Exchange rallied 2.77 percent to 755.06, with banking stocks up 8.5 percent on improved local expectations of an agreement.
The bond deal is an integral part of the country’s second package of international bailout loans, from eurozone countries and the IMF, worth $171 billion.
Greece was trying to step up the pressure on other private creditors to sign up.
The country’s Public Debt Management Agency issued a warning to potential holdouts on the agreement, known as the Private Sector Involvement, which depends on high participation to have any success.
“Greece’s economic program does not contemplate the availability of funds to make payments to private-sector creditors that decline to participate in PSI,” the agency said.
