Demand for Greece’s first bond sale in four years was driven by “real money investors,” according to the country’s finance ministry.
Almost half of the 3 billion euros ($4.2 billion) of five- year bonds issued on Thursday went to investors from the U.K., 7 percent stayed in Greece and about another third was snapped up by investors from the rest of Europe, according to a statement late Thursday from the Athens-based ministry. Hedge funds bought a third of the bonds and asset managers accounted for 49 percent of the investor base, according to the statement.
“It’s becoming increasingly clear that the probability of default for Greek foreign-law government bonds is low and declining,” Themistoklis Fiotakis, a London-based analyst at Goldman Sachs Group Inc., said in a note on Thursday. “The Greek government has regained credibility by showing willingness to adopt reforms, which, although unpopular, have helped the country’s recovery prospects.”
Greece, which has been bailed out twice, went through the world’s biggest sovereign-debt restructuring and came close to exiting the euro, had been shut out of bond markets since March 2010 while kept afloat with aid totaling 240 billion euros from the euro area and the International Monetary Fund.
Those funds necessitated the regular presence in Athens of officials from the so-called troika of the European Commission, the European Central Bank and the IMF, which became associated with austerity measures that triggered a political and social backlash.
Prime Minister Antonis Samaras said Thursday that the sale “exceeded all expectations,” as the country targeted raising 2.5 billion euros and received more than 20 billion euros in orders.
The yield on Greek 10-year bonds climbed 20 basis points, or 0.2 percentage point, to 6.15 percent at 12:29 p.m. Athens time. The rate touched 5.80 percent on April 10, the lowest since February 2010.
German Chancellor Angela Merkel travels to Athens on Friday for talks with Samaras and the two leaders are scheduled to hold a press conference at 6:30 p.m. local time. They are also set to sign an accord in which each government will commit 100 million euros to a planned Greek business-development bank, the Handelsblatt newspaper said Friday, citing government officials it didn’t identify.
The debt agency, which has continued to issue treasury bills throughout the debt crisis, will sell 1.25 billion euros of 13-week notes on April 15, it said in a statement on Friday.