By Peter OBIORA InvestAdvocate

Lagos (INVESTADVOCATE) – Ms. Christine Lagarde, Managing Director (MD) of the International Monetary Fund (IMF) Thursday endorsed the Eurogroup’s decision to support the debt buy back operation for Greece.

This is contained in a Press Release posted on the website of the IMF.

“I welcome the Eurogroup’s decision to support the debt buy back operation for Greece and its assurances to provide additional debt relief if necessary and provided Greece has achieved a primary budget balance in 2013. These steps will ensure that Greece’s debt-to-GDP declines to 124 percent by 2020 and to substantially below 110 percent by 2022.

“On this basis, I intend to recommend to the Fund’s Executive Board that it completes the first review of Greece‘s Fund-supported program. I expect that a Board meeting could take place in January.” Ms. Lagarde said.

It was reported recently that Greece is set to purchase back about half of its debt owned by Private Investors, and the move is expected to be the key to the country’s international bailout.

According to Reuters, Greek and Foreign Bondholders offered a targeted 30 billion euros ($38.8 billion) in the deal, “which is central to efforts by Greece‘s euro zone and International Monetary Fund Lenders to cut its debt to manageable levels” the report said.

“The buyback went well in broad terms. The amount offered by investors was within the range expected, about 30 billion euros,” the official told Reuters on condition of anonymity. He did not provide more details.

Reuters report affirmed that the buyback accounts for about half of a broader, 40-billion euro EU/IMF debt relief package for Athens agreed in November. “The package broadly doubles the average maturity of its rescue loans to almost 30 years and cuts its interest rates by one percentage point to a level far below 1 percent.

Under its terms, Athens will spend up to 10 billion euros of borrowed money to buy back bonds with a nominal value of about 30 billion euros. This is nearly half the 63 billion euros of Greek debt held by private investors eligible for the plan.

Since the bonds are to be bought far below their nominal value, the country’s net debt burden would fall by about 20 billion euros” Reuters reported.

The report by Reuters further affirmed that a successful buyback will ensure that the IMF, which contributes about a third of Greece‘s bailout loans, will stay on board of the rescue. It would also unlock the payment of 34.4 billion euros of aid later this month.