ATHENS, Greece (AP) -- Greece took a critical step toward staving off an imminent bankruptcy after securing the support of the vast majority of its bondholders to accept steep losses on their holdings of Greek debt, a move that should pave the way for the country's second massive international bailout.

Following weeks of intense discussions, Greece's Finance Ministry said Friday that 85.8 percent of private investors holding its Greek-law bonds had signed up to the deal, and that it aimed to use legislation forcing the holdouts to participate. It extended the deadline for holders of bonds that are governed by foreign laws, of whom 69 percent have so far signed up, until March 23.

The deal aimed to slash the country's national debt by (euro) 107 billion ($140 billion), with private bond holders accepting a face-value loss of 53.5 percent in exchange for new bonds with more favorable repayment terms. A total of (euro) 206 billion ($273 billion) out of Greece's (euro) 368 billion ($487 billion) national debt is in private hands.

If the swap had failed, Greece would have faced defaulting on its debts in two weeks, when it faced a large bond redemption. Getting the bond swap through is a key condition for Greece to get its hands on a (euro) 130 billion ($172 billion) package of rescue loans from other eurozone countries and the International Monetary Fund.

``We have achieved an exceptional success ... and I believe everyone will soon realise that this is the only way to keep the country on its feet and give it a second historic chance that it needs,'' finance minister Evangelos Venizelos said in Parliament Friday.

Markets generally suffered a bout of profit-taking following Thursday's euphoria when hopes of a successful bond swap swelled. An expectation that insurance policies on Greek bonds will be paid out tempered the mood on Friday too.

The Stoxx 50 of leading European shares was up 0.1 percent, but the main stock index in Athens fell 1.3 percent. The euro retreated slightly from recent highs to trade 0.4 percent lower at $1.3215.

``After quite a rollercoaster ride, it looks like Greece has finally done it ... allowing Europe to avoid what could have been a disorderly default in which the costs do not bear thinking about,'' said Simon Furlong, a trader at Spreadex.

A more detailed look at the results of the swap shows that holders of (euro) 172 billion ($228 billion) in Greek- and foreign-law bonds agreed to sign up to the deal. By triggering the legislation known as collective action clauses to force holdouts to join, Greece will secure a participation level of 95.7 percent, or (euro) 197 billion ($261 billion).

``The very strong and positive result provides a major opportunity now for Greece to move ahead with its economic reform program, while strengthening the euro area's ability to create an economic environment of stability and growth,'' said Josef Ackermann, chairman of the International Institute of Finance, which had negotiated in the deal on behalf or large private creditors.

The bond swap is a radical attempt to pull Greece out of its debt spiral and put its shrinking economy back on the path to recovery. The hope is that by slashing the overall debt, the country, which is in a fifth year of recession, can gradually return to growth and eventually repay the remaining money it owes.

A debt crisis sparked by years of overspending and waste has left Greece relying on funds from international bailout loans since May 2010. The austerity measures including salary and pension cuts and tax hikes imposed in return have led to record unemployment and a deep recession, but its politicians came under criticism for dragging their heels in implementing reforms.

``I wish to express my appreciation to all of our creditors who have supported our ambitious program of reform and adjustment and who have shared the sacrifices of the Greek people in this historic endeavor,'' Venizelos said. ``With the support of our official sector and private creditors, Greece will continue implementing the measures needed to achieve the fiscal adjustments and structural reforms to which it has committed, and that will return Greece to a path of sustainable growth.''

Venizelos is to hold a news conference later Friday, ahead of a conference call between the finance ministers of the 17 European Union countries that use the euro to discuss the deal's results.

Germany's Finance Ministry welcomed the outcome, describing the wide acceptance of the bond swap as ``a big step on the path of stabilization and consolidation'' that has ``given Greece a historic opportunity.''

The ministry said it is now awaiting the assessment of Greece by the so-called troika of international creditors as to whether the result meets the conditions for the release of the next bailout.

The International Swaps and Derivatives Association said it would also meet later Friday to determine whether the deal would be deemed a so-called ``credit event'' _ a technical default _ which would trigger the payment of credit default swaps, which is essentially insurance against a default.

When the debt relief plan was first announced last year, eurozone leaders and the ECB worked hard to avoid a credit event, because they feared the a payout of CDS could destabilize big financial institutions that sold them.

However, since then a CDS payout has started to look less threatening. The ISDA, a private organization that decides on credit events, said that if triggered, overall payouts on CDS linked to Greece will be below $3.2 billion. That amount is spread over many financial firms and likely too small to significantly hurt any one of them.

The bond swap deal is an essential part of Greece's second international bailout, and the country now hopes to start receiving funds from the (euro) 130 billion package of rescue loans. The IMF has set a tentative board meeting date of March 15 to discuss the size of its participation in Greece's second bailout.