Greece gets $17.9b EU aid, to repay bond
Wednesday, 19 May 2010
ATHENS, May 18 (Reuters): Greece received a 14.5-billion euro ($17.9 billion) emergency loan from the European Union Tuesday and will use some of the money to fully repay an 8.5-billion euro bond maturing the next day, officials said.
It was Greece's presumed inability to redeem this euro bond, which matures Wednesday, that prompted the EU and IMF to intervene and eventually agree to a 110-billion euro aid package this month. The IMF has already lent Greece 5.5 billion euros.
"The 14.5 billion euros was transferred to Greece a short while ago, through the ECB," said a Greek bank official close the deal, speaking on condition of anonymity.
Greece will now use some of the funds to fully repay the 10-year bond, a government official said.
"Repayment to bondholders will proceed normally on May 19," the official, who declined to be named, told the reporter.
The 6 per cent fixed-coupon bond was a major refunding hurdle for Greece this year along with a 5-year, 8.2 billion euro bond that was repaid on April 20.
According to a standard convention for Greek bonds, Greece would not technically default on its payments as long as it paid the principle within seven days and the interest within 30 days, but the markets might well have viewed any delay differently.
It was Greece's presumed inability to redeem this euro bond, which matures Wednesday, that prompted the EU and IMF to intervene and eventually agree to a 110-billion euro aid package this month. The IMF has already lent Greece 5.5 billion euros.
"The 14.5 billion euros was transferred to Greece a short while ago, through the ECB," said a Greek bank official close the deal, speaking on condition of anonymity.
Greece will now use some of the funds to fully repay the 10-year bond, a government official said.
"Repayment to bondholders will proceed normally on May 19," the official, who declined to be named, told the reporter.
The 6 per cent fixed-coupon bond was a major refunding hurdle for Greece this year along with a 5-year, 8.2 billion euro bond that was repaid on April 20.
According to a standard convention for Greek bonds, Greece would not technically default on its payments as long as it paid the principle within seven days and the interest within 30 days, but the markets might well have viewed any delay differently.