Euro zone finance ministers and officials met in Brussels to discuss terms of a Greek debt restructuring as part of a second bailout package for Athens and rejected an offer made by private bondholders to help restructure those debts, officials said, sending negotiators back to the drawing board.

Following are comments after their talks:

EUROGROUP PRESIDENT JEAN-CLAUDE JUNCKER

ON COUPON ON NEW GREEK BONDS:

Ministers were asking their Greek colleagues to pursue negotiations to bring the interest rates on the new bonds to below 4 percent for the total period, which implies that the interest comes down to well below 3.5 percent before 2020.

ON COMBINED CAPACITY OF TEMPORARY AND PERMANENT BAILOUT FUNDS:

We will reassess the adequacy of the overall lending ceiling of the EFSF and the ESM of 500 billion (euros) (414 bilion pounds) in March of this year.

ON AGREEING A FISCAL COMPACT:

We have had an extremely constructive meeting on the fiscal compact and this text is a good basis for the discussions for the heads of government at the end of the month. Our aim is that the treaty is signed by the beginning of March.

This treaty will help us to ensure fiscal sustainability in the euro area. Member states will implement a balanced budget rule in a binding manner in their national legislation.

ON BONDHOLDER LOSSES ON GREEK DEBT:

We reviewed the process of the consultations on the PSI (private sector involvement) operation between the Greek government and the IIF-led creditor group as well as the discussions in Athens between the troika and the Greek government on the new adjustment programme.

We welcome the increased convergence and ask the Greek government to reach in the next few days a common understanding on the main terms and conditions of the PSI offer, while respecting the main parameters and objectives set by the euro summit on the October 26.

PSI should secure the decline of the Greek debt-to-GDP ratio with an objective of reaching 120 percent by 2020. This should take place by a voluntary bond exchange with a nominal discount of 50 pct on notional Greek debt held by private investors.

In parallel we call on the Greek government and the (EU-IMF) troika to agree on the key parameters of an ambitious new adjustment programme as soon as possible.

Let me make it crystal clear -- there are absolutely no divergences of view on this matter around the table: for everyone of us the future of Greece is clearly within the euro area.

ITALIAN PRIME MINISTER AND ECONOMY MINISTER MARIO MONTI

ON THE ESM PERMANENT BAILOUT FUND -- ASKED IF THE TREATY WAS READY:

The treaty is still to be finalised.

ON THE SITUATION IN ITALY AND THE DEREGULATION PACKAGE:

What we have done and are doing was really appreciated. On Italy everything went really well.

EUROPEAN FINANCIAL STABILITY FACILITY (EFSF) CEO KLAUS REGLING

ON S&P DOWNGRADE OF EFSF RATING:

The market reaction to the downgrade by S&P has been limited... The fact that the downgrade to AA+ happened by only one rating agency means it will not reduce the EFSF lending capacity of overall 440 billion euros, and that means the EFSF has sufficient means to fulfil its commitments on the current and future potential adjustment programmes, until the ESM becomes operation in July this year.

Consequently there was no need today to take any decisions in the Eurogroup.

ON EFSF LEVERAGE:

The S&P rating action on EFSF will also not affect the EFSF's capacity to leverage its resources. Leverage of three or more (times) is possible and is confirmed in our talks with investors. On this leveraging, I can tell you that we have made substantial progress in our work.

You remember that there are two potential options that we want to use to leverage the resources. Option one - the partial risk protection. This will be available by the end of the month. This has been incorporated in the form of an SPV in early January.

The option two is the co-investment fund (CIF). Here also the structure was incorporated last week, on January 19. The CIF will be available soon. At least the two-tranche structure of this CIF, this two-tier structure means there will be a first-loss tranche from the ESM and the second tranche from an investor, this structure will be ready soon.

And we have been discussing with a number of investors to operate the two-tranche structure. In that context we have received a good positive feedback on this option from investors outside Europe and a first wave of commitments amounting to about 60 billion euros, we have obtained that. Therefore I am confident that the scheme when needed can be launched and will attract substantial funds.

(Reporting by Annika Breidthardt, Francesca Landini, Jan Strupczewski and Robin Emmott)