ATHENS, Greece -- Greece and investors who have bought its bonds have reached a tentative deal to significantly reduce the country's debt and pave the way for it to receive a much-needed (euro) 130 billion bailout.
Negotiators for the investors announced the tentative agreement Saturday and said it could become final next week.
Under the agreement, the (euro) 206 billion worth of Greek bonds that investors own would be exchanged for new bonds worth 60 percent less. That will help Greece remain solvent and avoid a potentially devastating blow to Europe's already weakened financial system.
Private investors would receive new bonds whose face value is half of the existing bonds. The new bonds would have a longer maturity and pay an average interest rate of slightly less than 4 percent.