Date
11 December 2017
Finance Minister Euclid Tsakalotos says Greece's first attempt at a bond sale in three years went better than expected. Photo: Reuters
Finance Minister Euclid Tsakalotos says Greece's first attempt at a bond sale in three years went better than expected. Photo: Reuters

Greece gets solid demand for first bond issue in three years

Greece got solid demand Tuesday for its first bond issuance in three years, in what the government sees as the first of several moves that will enable the debt-ridden country to wean itself from new bailouts, the Wall Street Journal reports.

Tuesday’s deal included an invitation for holders of a bond coming due in 2019 to swap their securities for new ones due in 2022.

Greece sold €3 billion worth of the 2022 bond, Greek government officials and bankers said. About half of that is new money, and half is existing investors in the 2019 bond who switched, according to one of the banks managing the deal.

The new bond matures in August 2022 and will yield 4.625 percent. The 2019 bond is yielding around 3.2 percent, so investors will be paid a decent premium for participating in the swap.

Greek bonds have been on a tear of late. Greece paid €102.60 per €100 face value of the 2019 bond. A year ago, the bond was trading below €90.

Still, the sum raised is a token—less than 1 percent of Greece’s total debt—and on its own not enough to forestall the need for more aid or other concessions from its eurozone rescuers. But the bond issuance was meant as a show of confidence and test of investors’ appetite for its debt, two years after the country was teetering on the brink of collapse and eurozone exit. It is also a way to ease a big hump of debt repayments due in 2019.

Athens’ debt office is aiming to go ahead with more bond issues before the end of the country’s third bailout in mid-2018.

“They need to show the market that they can stand on their own feet,” said Giuseppe di Mino, managing director at hedge fund Amber Capital who expects another Greek debt sale toward the end of the year.

Greek officials hope that this time the return to the markets will be consistent.

Greece’s Finance Minister Euclid Tsakalotos said this Greece first attempt went better than expected and more will follow before Greece fully regains market access when its bailout expires.

“From now on we are focused on August 2018,” Tsakalotos said in a televised statement. “There will be a second and a third [market access] to approach August 2018 with confidence and emerge from bailouts.” 

– Contact us at [email protected]

RA

 

EJI Weekly Newsletter

Please click here to unsubscribe