The country will now activate Collective Action Clauses on those who held out, raising participation to 95.7 percent. The activation of CACs was agreed during a conference call with the Eurogroup of euro zone finance ministers Friday.

"The Eurogroup was informed that Greece will activate the collective action clauses applicable to bonds governed by Greek law," Eurogroup President Jean-Claude Juncker said in a statement.

He added that Greece had met the conditions for the next step of its second bailout deal.

Greece's cabinet later also approved the activation of the collective action clauses, Dow Jones news agency reported.

Ratings agency Fitch cut Greece's credit rating to "restricted default" over the debt swap on Friday. The move was expected, and makes Fitch the third of the three major rating agencies to downgrade Greece into default territory.

Fitch said in a statement it would upgrade Greece's rating once the debt exchange was completed and the new securities have been issued, adding that the new rating was likely to be low speculative grade, Reuters reported.

The troubled country has been surrounded by speculation this week that it might not be able to get enough bondholders signed up to the deal – the largest debt restructuring in history - to get it through. It has to use bailout money from the troika of the International Monetary Fund, European Central Bank and European Commission to avoid defaulting on its next debt repayment, due March 20.

Holders of around 5 percent of the bonds rejected the deal.

The International Swaps and Derivatives Association met at 2:00 p.m. CET to determine whether a credit event has occurred - which could trigger payouts on credit default swapson Greek debt.

The closely-watched offer, which will involve Greece’s creditors taking hefty haircuts to the value of their debt, closed late Thursday. The Greek finance ministry said in a statement that 172 billion euros had been tendered for the deal – 152 billion euros of bonds governed by Greek law, and 20 billion euros under international law. This means that bondholders representing 85.8 percent of the bonds governed by Greek law signed up to the deal.

After just 69 percent of those holding bonds governed by international law and issued by public companies accepted the deal, the deadline for them to accept has been extended to March 23.

Olli Rehn, the euro zone’s top economic official, welcomed the deal Friday and said the backing showed “strong support” for Greece’s second bailout deal, reached last month.

He added: “I now expect the Greek authorities to maintain their strong commitment to the economic adjustment programme and to rigorously and timely implement the policy package. This second programme is the corner stone of our efforts to boost sustainable growth and jobs in Greece; it is a unique opportunity not to miss. Furthermore, the success of this programme is a cornerstone of our comprehensive response to the current crisis.”

IMF Managing Director Christine Lagarde said: "This is an important step that will dramatically reduce Greece’s medium-term financing needs and contribute to debt sustainability. This support by the private sector is a key component of the contribution by all parties to put Greece’s economy on a path of growth and financial stability."

Greece is still struggling with a hefty debt pile, high unemployment and recession, and will now embark on a new austerity program, sell-offs of state-owned assets and prepare to elect a new government.

Evangelos Venizelos, Greek Finance Minister, said in a statement: “On behalf of the Republic, 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 endeavour. 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.”

Charles Dallara and Jean Lemierre, co-chairs of the international committee set up to steer Greece through its bailout and austerity package, said in a statement:

“The debt exchange results, and the associated unprecedented upfront nominal reduction in the privately held Greek debt, will catalyze the strong financial official sector support for Greece’s new three-year reform program. We are firmly of the view that the new program will provide Greece with breathing space to implement the broad range of fiscal and structural reforms needed to restore output and employment growth and pave the way toward regaining market access.”