A whopping 85.8% of Greece's private bondholders have agreed to swap their bonds for new ones that are worth half as much, the country announced today. "The response exceeded all expectations, and every historic precedent," Greece's finance minister boasted. Greece can now use a "collective-action clause" to force most of the holdouts to accept, bringing participation up to 95%.
Voluntary participation this high seemed unlikely a few weeks ago, but Greece pursued an aggressive legal and rhetorical strategy, telling bondholders there would be no deals for holdouts, the New York Times reports. The Institute of International Finance also circulated a confidential memo estimating that a disorderly Greek default would result in a trillion-euro loss for banks, corporations, and government. Though many decried the memo as a scare tactic, it seems to have convinced many to swap.