ATHENS  - Greece launched an unprecedented bond swap with private creditors to write off nearly a third of its massive debt and unlock a huge new eurozone bailout less than a month before it faces default. Holders of Greek bonds were invited to exchange an aggregate value of 206 billion euros ($271 billion) in return for new 30-year maturities, EU-backed notes and Greek output-linked securities.

But Athens warned that 75 percent of eligible investors had to participate or the exercise would be called off. “If less than 75 percent of the aggregate face amount of the bonds selected to participate are validly tendered for exchange...the (Hellenic) Republic will not proceed with any of the transactions described above,” the finance ministry said in a statement posted on special purpose website

And it noted that under legislation hurriedly approved on Thursday, the exchange becomes binding for bonds governed by Greek law “if at least two thirds by face amount of a quorum of these bonds...approve the proposed amendments.”

The debt writedown is the greatest ever attempted, overshadowing Argentina’s $82-billion default in 2002, the equivalent of 73 billion euros.

Charles Dallara, the chief of the IIF banking sector body that negotiated the swap deal with the Greek government earlier this week, hailed it as a “historical, unprecedented restructuring of sovereign debt.”

“We are quite optimistic that once investors study the proposal carefully ... there will be a high take up in a voluntary fashion,” he said.

First in line is a three-year Greek bond worth 14.43 billion euros that matures on March 20 and cannot be repaid by Athens if the exchange fails.

Tied to the debt write-down are 130 billion euros of new eurozone loans, after a prior EU-IMF bailout of 110 billion euros and an accompanying fiscal adjustment programme failed to revive the Greek economy, now in its fifth year of recession.

Prime Minister Lucas Papademos earlier on Friday said the country had made a “titanic” effort to get back on track with a flurry of new austerity laws. “Greece has made a titanic effort to finalise the decision on PSI (Private Sector Involvement) and conditions for granting the aid,” Prime Minister Papademos told his cabinet.

“The legal procedure is satisfactory but there are still unresolved issues,” he added after the government approved the bond swap arrangement.

Speaking in Germany, Eurogroup chairman Jean-Claude Juncker said he was “full of hope” that Greece’s efforts would pay off as he called for a greater European focus on helping struggling states back to growth. “Nobody should believe that Greece will rapidly get back to its feet, but nobody should believe that Greece will come out of this without our solidarity either, or without an organised policy for growth,” he added. “We will take care of this,” Juncker said after a meeting with German Chancellor Angela Merkel in Germany.

The bid to cancel about 107 billion euros ($143 billion) in Greek government bonds, nearly a third of the 350 billion euros owed by Athens, is to be concluded by March 12 on a first set of bonds. Terms of the deal were hammered out with the Institute of International Finance and were part of marathon talks held earlier in the week in Brussels.

After months of talks, it seemed likely that most private creditors would accept the deal, mindful that they could get nothing at all if Greece were to default. A large part of the debt is held by Greek banks and pension funds. Greek banks in September were estimated to hold at least 26.4 billion euros, and pension funds control another 27 billion euros, Venizelos told parliament on Friday. If Greece ropes in 66 percent of the creditors governed under Greek law to sign up the deal, it plans to impose a Collective Action Clause (CAC) which would force hold-outs to accept it too.

Next week, parliament is expected to adopt two crucial laws requested by the EU, European Central Bank and IMF, the official creditors overseeing implementation of the bailout deal. The laws would introduce new salary and pension cuts and restructure the existing health system, mostly by merging hospitals and reducing medical expenditures.