The Greek government announced today that it has persuaded the vast majority of its private creditors to reduce the value of their Greek bond holdings, helping the country to again stave off bankruptcy.
The deal will see private bond holders accepting a face-value loss of 53.5 per cent in exchange for new bonds and offering easier repayment terms.
Finance Minister Evangelos Venizelos told Parliament that 85.8 per cent of private investors holding its Greek-law bonds had signed up to the deal, and that the government now intends to use legislation to force those creditors still holding out against the deal to participate.
Mr Venizelos said he would recommend the activation of the "collective action clauses" law.
"A window of opportunity is opening" with the success of the deal to massively reduce the country's debt by €105 billion (£88bn), or about 50 percentage points of gross domestic product, he said.
"The debt exchange represents the largest ever sovereign debt restructuring," said Charles Dallara, managing director of the Institute of International Finance, the body that negotiated the deal with the Greek government on behalf or large investors.
A total of €206bn (£172bn) out of Greece's €368bn (£307bn) national debt is in private hands.
If the swap had failed, Greece would have faced defaulting on its debts in two weeks' time, when it faced a large bond redemption.
The Greek government's creditors, the EU, European Central Bank and International Monetary Fund, had made the bond swap deal a key condition for it to receive a fresh package of loans worth €130bn (£109bn).