Greece hired banks to sell three-year debt, accessing international markets for the second time in three months, after European Central Bank stimulus measures fueled a rally in bonds across the euro area this year.
Bank of America Merrill Lynch, Citigroup Inc., Deutsche Bank AG, Goldman Sachs Group Inc. and JPMorgan Chase & Co. will sell the notes on behalf of the Mediterranean nation, according to a person familiar with the matter, who asked not to be identified because they’re not authorized to speak about it. The transaction will be priced in the near future, the person said.
Greece returned to bond markets for the first time since 2010 in April, when it sold 3 billion euros ($4.1 billion) of five-year securities via banks. Orders for that sale exceeded 20 billion euros, the government said at the time.
It’s a renaissance for the nation that sparked the euro area’s debt crisis almost five years ago when it said its deficit was bigger than previously thought. Greece was locked out of international bond markets after a surge in yields and has been kept afloat since then with international bailout loans. Ireland and Portugal were among nations that also required rescues as the financial woes spread.
Now, capital markets are thawing for even those countries that had been frozen out during the crisis. Demand for the euro region’s bonds surged since ECB President Mario Draghi pledged in 2012 to do whatever was needed to save the euro. The rally was boosted this year by stimulus measures introduced on June 5, including charging banks to park cash overnight with the central bank and targeted cheap loans.
Portugal last month held its first auction since exiting its three-year international rescue program, and Ireland has resumed regular auctions. Cyprus also held a bond sale in June, helping consign the debt crisis to history.
European governments frequently hire banks to help them sell a new, longer-dated security by broadening potential demand for the debt.
Greek securities returned 29 percent in the year through yesterday, the most among sovereign-debt markets tracked by the Bloomberg World Bond Indexes.
The average yield to maturity on debt from Greece, Ireland, Italy, Portugal and Spain fell to 1.91 percent last month, the lowest since at least 1998, according to Bank of America Merrill Lynch indexes. A measure of all euro-area government bonds reached a record-low yield of 1.29 percent Tuesday. [Bloomberg]