BUSINESS

Greece sells 6-month T-bills at cheapest cost in four years

Greece on Tuesday sold six-month treasury paper at the cheapest borrowing cost since its debt crisis began in early 2010, most of it to foreign buyers.

The sale will act as a fillip to a planned return to longer-term bond markets in the first half of the year after a four-year absence.

The country's debt agency (PDMA) sold 1.3 billion euros ($1.79 billion) of six-month T-bills to refinance a maturing issue at a yield of 3.01 percent, down 59 basis points from a March auction.

It was the lowest funding cost on six-month T-bills since January 2010, when the agency sold similar paper at 1.38 percent.

"There was strong foreign interest, most of the issue went to foreign buyers,» said an agency official who declined to be named, adding that foreigners bought about 80 percent of the issue.

Foreign take-up of treasury issues in the last three months had hovered at around 40 percent.

Greece lost access to bond markets four years ago, when its debt crisis erupted and monthly T-bill sales are its sole source of market funding.

Athens plans to sell about 2 billion euros of five-year bonds, according to government and banking sources - its first foray into bond markets since the first of its two international bailouts in 2010.

Two of the country's top four banks - Piraeus and Alpha - tapped markets successfully last month, raising 3 billion euros of equity between them.

Piraeus was also the first Greek bank to tap bond markets since 2009 last month.

The correction of fiscal imbalances and signs that the country's battered economy is likely to recover from a six-year recession this year have helped drive Greece's 10-year yields to their lowest since its first bailout.

The sale's bid-cover ratio was 3.10, up from 2.31 in the previous sale. The amount raised included 300 million euros in non-competitive bids. The settlement date for Tuesday's auction will be April 11.

[Reuters]

Online