Greece will spend up to $13 billion in a heavily-discounted bond buyback program that it hopes will help stabilize its debts, officials said today. Private holders of Greek bonds, such as banks and pension funds, have until Friday to register their interest in participating in the buyback program. It will be conducted by what is known as a Dutch auction, a type of auction in which prices start high and then decline. The buyback should be completed by Dec. 17, the Public Debt Management Agency said in its announcement.
Greek officials are to brief the 17 finance ministers in the eurozone on details of the plan when they meet in Brussels today. The buyback was agreed at a meeting last week of the eurozone and the International Monetary Fund when Greece's next bailout payment was authorized. The hope behind the buyback is that it will shave about $26 billion off the country's debt. It comes less than a year after private holders of Greek debt agreed to a big writedown in the value of their Greek bonds.