BRUSSELS -(Dow Jones)- Euro-zone finance ministers early Tuesday agreed an ambitious EUR130 billion rescue deal that will see Greece's private creditors take an even larger loss in order to put the debt-laden country on a sustainable footing, said Jean-Claude Juncker, Luxembourg's prime minister and chairman of the Eurogroup.
Speaking after the conclusion of more than 12 hours of negotiations, Juncker said the agreement will see private bondholders write down at least 53.5% of the face value of their holdings.
That goes beyond the 50% agreed at a summit in October.
The agreement involves a debt exchange that will see private investors trade their existing bonds for new bonds offering a coupon of 2% until 2014, 3% between 2015 and 2020, and 4.3% thereafter, Juncker said.
The deal will see Greece's debt as a proportion of gross domestic product lowered to 120.5% by 2020 from over 164% currently.
The Eurosystem's holdings of Greek debt have been exonerated from any losses, Juncker said.
Instead, the European Central Bank will disperse any profits it makes on the portfolio of bonds it holds under the Securities Markets Program " in line with the ECB's statutory profit distribution rules".
In addition, national central banks in the euro zone will transfer to Greece any profits arising from those Greek bonds they hold as investments.
European Commissioner Olli Rehn said there will also be permanent representatives of the troika--the ECB, International Monetary Fund, European Commission--on the ground in Greece to monitor the program.
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Speaking after the conclusion of more than 12 hours of negotiations, Juncker said the agreement will see private bondholders write down at least 53.5% of the face value of their holdings.
That goes beyond the 50% agreed at a summit in October.
The agreement involves a debt exchange that will see private investors trade their existing bonds for new bonds offering a coupon of 2% until 2014, 3% between 2015 and 2020, and 4.3% thereafter, Juncker said.
The deal will see Greece's debt as a proportion of gross domestic product lowered to 120.5% by 2020 from over 164% currently.
The Eurosystem's holdings of Greek debt have been exonerated from any losses, Juncker said.
Instead, the European Central Bank will disperse any profits it makes on the portfolio of bonds it holds under the Securities Markets Program " in line with the ECB's statutory profit distribution rules".
In addition, national central banks in the euro zone will transfer to Greece any profits arising from those Greek bonds they hold as investments.
European Commissioner Olli Rehn said there will also be permanent representatives of the troika--the ECB, International Monetary Fund, European Commission--on the ground in Greece to monitor the program.
nasdaq.com
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