Greek state proceeds with bond swap

The Greek government began the process Monday of swapping its privately-held bonds under Greek law with new ones worth less than half of their original value.

On Friday, Greek Finance Ministry officials said 85.8 per cent of private investors - holding 177 billion euros (232 billion dollars) in bonds issued under Greek law - had signed up to the debt swap deal, which will slash the country's 350-billion-euro debt by 105 billion euros.

The deadline for foreign-law bonds has been extended to March 23.

Had the deal - in which investors were asked to accept an effective loss of around 70 per cent - failed, Greece would have risked defaulting on its debts by the end of this month.

The arrangement paves the way for the release of a second international bailout worth 130-billion euros. - Sapa-dpa