ATHENS, Greece (AP) — Greece's three biggest banks said Friday they would participate in a large bond buyback scheme that aims to chip away at the crisis-hit country's debt load and ensure it continues to get its international bailout loans.

The announcements by National Bank of Greece, Eurobank and Alpha Bank came hours before the deadline for private-sector holders of Greek sovereign bonds to join the scheme, under which they would sell back their devalued Greek debt holdings to the government.

Two smaller domestic lenders also said they would participate.

Finance ministry officials said after the deadline ended that they would have a clear picture of bondholders' response on Saturday, and an announcement is expected over the weekend.

The government has said it will spend about €10 billion ($13 billion) in European funds on the buyback, offering between 30 and 40 percent of the bonds' face value. Because the paper was trading at even lower prices than that on the secondary bond market, Athens hopes investors — many of whom bought the bonds at less than half that price during the height of the crisis — will leap to the offer.

Financial markets reacted positively to the news, with the main stock index in Athens rising 1.1 percent, better than its European counterparts.

A debt buyback would allow Greece to get its hands on about half its bonds held by private investors, which have a total face value of some €63 billion ($81 billion). About a quarter of these bonds belong to domestic lenders. Greek pension funds hold a further €8 billion but are not participating, while an estimated €15-25 billion is owned by international hedge funds.

The government has said that success is of vital importance, but indicated that it has a backup plan if the buyback fails.

Greece is in the grip of a vicious financial crisis, born of decades of overspending and poor fiscal management. The country is heading into a sixth year of a deep recession, expected to reach a cumulative 25 percent by the end of 2013. Continued...