Bankers and insurance executives are meeting in Paris today to press ahead with efforts to restructure Greece's government debt into a more manageable repayment time frame.
The Paris meeting is being chaired by Charles Dallara, managing director of the Institute of International Finance -- a banking lobby group.
Sources involved said the meeting is one of a series aimed at hammering out the details of private sector participation in the second Greek bailout.
The bankers will consider a version of the French government plan to roll Greek government bonds that they hold for up to 30 years and will also discuss possible buyback deals, according to sources.
A more informal session was held last night.
The bankers are supportive, or at least resigned, to the outlines of a French government proposal for private-sector lenders volunteering to reloan the majority of cash they are owed by the Greek government back to the country.
The money will be reloaned at higher interest rates than Greece currently pays, but at less than the market would command today.
The new bonds will benefit from extra security -- possibly including a claim on a pool of high-quality European Union-backed bonds. The bankers' concern now is to ensure a deal is structured to avoid triggering adverse accounting treatment of the new bonds.
Analysts say it is also clear the European Central Bank (ECB) will cherry-pick the best rating it can find for Greece to facilitate the French-style plan.
On Monday, markets were weaker after ratings agency S&P said it was likely to treat the French plan as a selective (ie limited) default.
Yesterday, German Chancellor Angela Merkel indicated that decisions by rating agencies would not be allowed to block a deal on Greece.
"As far as the rating agencies are concerned, I think it's important that we -- and by this I mean primarily the troika, the IMF, the European Central Bank and the EU commission -- don't surrender our own ability to judge," Ms Merkel told reporters in Berlin yesterday.
With so many moving parts still in play, bond markets remain volatile.
Irish 10-year government bonds traded very slightly better last night, closing at a yield of 11.309pc, while Greek bonds were more than half a per cent weaker at 25.95pc.