September 28, 2011 / 5:55 AM / 7 years ago

Greek debt swap plan reaches 90 pct take-up target - paper

ATHENS, Sept 28 (Reuters) - Participation in a debt swap plan aimed at cutting Greek debt has reached a 90 percent target and could even exceed it, the Naftemporiki newspaper said on Wednesday, citing an unidentified finance ministry official.

Athens has been struggling for weeks to gather enough interest in the bond swap plan, which is a key part of an EU bailout package agreed in July to save the country from bankruptcy.

It has said it may not go ahead with the swap if the target was not met.

Although no official amount has been announced, participation had so far been estimated at about 75 percent, with another Greek daily writing on Monday that it had reached 85 percent.

“According to a Finance Ministry official, the participation of investors has reached the 90 percent target of bonds maturing until 2020 and could even exceed it,” financial daily Naftemporiki said.

“The Greek default scenarios and the prospect of a 50 percent haircut of Greek bonds have alarmed institutional investors, who rushed to register to participate in the bond swap programme...according to the indications that the Finance Ministry has had in the past few days,” the newspaper said.

At an EU summit on July 21, private sector creditors, represented by the Institute of International Finance, agreed to help reduce Greece’s debt burden by around 37 billion euros via a debt buyback and bond exchange.

The plan foresees a 21 percent reduction in the value of holdings as part of the exchange. Over the past few days, speculation has grown that Greece may need a bigger, 50 percent haircut, although Athens has denied considering any such scenario. ** For the latest news on Europe’s debt crisis,

see (Reporting by Ingrid Melander and Tatiana Fragou; Editing by Kim Coghill)

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