Greece offered to spend 10 billion euros ($13 billion) buying back bonds issued in a record restructuring earlier this year as the nation attempts to cut a debt load that may threaten future international aid. Greece asked investors to tender bonds in a so-called modified Dutch auction, the Athens-based Public Debt Management Agency said in a statement today. PDMA offered an average maximum purchase price for the bonds maturing from 2023 to 2042 of 34.1 percent, based on information in the statement. The offer runs until 5 p.m. London time on Dec. 7. The offer is part of a package of measures approved by euro-area finance ministers last week to cut the nation’s debt to 124 percent of gross domestic product in 2020 from the 190 percent it was projected to reach in 2014. Success of the buyback is key to releasing aid that’s been frozen since June. Greek bonds rose for a third day, pushing the 10-year yield below 15 percent for the first time since the nation’s debt was restructured in March. The likelihood is “pretty high� that Greece will complete the entire buyback, Peter Schaffrik, head of European rates strategy at RBC, said in interview. Greek banks and some hedge funds are likely to join in, he said. Deepening Recession The yield on the 2 percent securities maturing in February 2023 fell 151 basis points, or 1.51 percentage points, to 14.63 percent at 9:45 a.m. London time, leaving the price at 39.31 percent of face value. Investors who agree to join the buyback will receive payment in six-month notes of the European Financial Stability Facility, the debt agency said. The IMF has set the 2020 debt-reduction target as a condition for continuing to fund a third of Greece’s bailout program. IMF Managing Director Christine Lagarde said after the euro-area finance ministers’ meeting that the fund will examine the results of the buyback before deciding whether to approve disbursement of additional aid. The buyback accounts for 11 percentage points, or more than half of the 20 percentage points of the planned drop. While Greece has gotten pledges for 240 billion euros of aid, the funds have been blocked since June as the government tries to get its bailout program back on track after it was disrupted by two elections and a deepening recession. The buyback will target 62 billion euros of new bonds issued after the debt swap, according to a Nov. 27 draft of a report by the so-called troika comprising the European Commission, the European Central Bank and the International Monetary Fund. Greek banks hold 15 billion euros of the new bonds, while the country’s pension funds hold 8 billion euros. Finance ministers plan to make a formal decision on Greece’s 34.4 billion-euro disbursement by Dec. 13. Deutsche Bank AG and Morgan Stanley International were appointed to manage the buyback, according to the PDMA. To contact the reporters on this story: Maria Petrakis in Athens at mpetrakis@bloomberg.net; To contact the editors responsible for this story: Stephen Foxwell at sfoxwell@bloomberg.net;

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