Enough private investors have agreed to take huge losses on their Greek bonds, enabling a debt swap deal to go forward, a government source says, clearing a key hurdle for a new bailout package for Greece.
As bondholders continued to decide whether to swap their Greek debt at a steep loss ahead of a 2000 GMT (0700 AEDT) deadline, a government source said participation had already exceeded 75 per cent, the minimum level sought by Athens for the deal to go through.
Talk that the level was close to being reached trickled out throughout the day, helping send stock markets sharply higher across the globe and giving leaders some confidence that a page was about to be turned.
Italian Prime Minister Mario Monti said over 60 per cent of private creditors had accepted the debt swap and the global bank association that led the initiative said a deal was close at hand.
'I'm optimistic that there's going to be an agreement in the next few hours,' said Charles Dallara, managing director of the International Institute of Finance (IIF) and chief negotiator for the banks involved in the debt writedown.
The swap is designed to erase more than 100 billion euros ($A124.7 billion) from Greece's near and midterm debt and replace it with new maturities.
Dallara, speaking in Rio de Janeiro, said the participation rate was 'way above' 50 per cent.
The exercise is meant to make repayment of the debt, currently at more than 350 billion euros, more sustainable in the immediate future, thereby giving the struggling Greek economy much needed breathing room.
'Tonight at midnight, a procedure of historic character reaches completion. An operation of unprecedented size and complexity to drastically cut Greek state debt,' Finance Minister Evangelos Venizelos told parliament.
Officials would need two hours after the deadline to determine the level of participation, Greek news reports said.
European stock markets posted strong gains on Thursday following rises across Asia, and Wall Street also opened up on optimism that Greece's debt swap would be successful.
'Global equity markets are rallying in front of the deadline for the private-sector involvement in the Greek debt swap plan, reflecting an expectation that the deal will get done and that a disorderly default will be avoided,' said Briefing Research.
Reaching the 75 per cent threshold allows Athens to trigger so-called collective action clauses it has retroactively introduced into the bonds to force holdouts to along with the deal.
The EU and International Monetary Fund would like to see 95 per cent participation to reduce Greece debt to a sustainable level of 120.5 per cent of gross domestic product (GDP) in 2020.
The Greek government will make an announcement on the swap on Friday, a finance ministry source said earlier.
'An announcement will be made at 0600 GMT (1700 AEDT) on Friday on the official government site for the exchange (www.greekbonds.gr),' the official said.
The Eurogroup of eurozone finance ministers was to review the outcome in a conference call on Friday, and meet on Monday in Brussels, Finance Minister Evangelos Venizelos said on Wednesday.
The International Monetary Fund's directors have tentatively planned to meet to weigh a new loan for Greece on March 15, Fund spokesman Gerry Rice said on Thursday.
Greece and the IIF have painted a dark picture of what the possible consequences might be if the country was forced into a disorderly default on March 20, when it is due to reimburse 14.4 billion euros in debt.
An IIF report warned that if the debt swap deal failed, it could do serious damage to the eurozone and even the global economy.
Published on Monday, the report put the price tag of a Greek default at one trillion euros.
The bond swap essential to unlock a 130-billion-euro bailout from Greece's eurozone partners, with Athens having already adopted a package of painful austerity cuts.
The debt writedown is the biggest ever attempted, overshadowing Argentina's $US82 billion default in 2002, the equivalent of 73 billion euros.