Large-caps tap bond markets on reduced interest rates

By Anestis Dokas

Blue chip companies have enjoyed borrowing costs of below 5 percent in their international corporate bond issues during the first half of the year. The main reason for the decline is the improvement in the country’s fiscal image, confirmed by Greece’s return to the bond markets in April for the first time since 2010.

After four years when Greek enterprises could only borrow at prohibitive interest rates that could reach up to 9 percent, they can now support their investment plans through international issues.

This barrage of bond issues, mostly seen in May and June, was crowned with significant success. The systemic banks, which opened the round of issues, were followed by Public Power Corporation, Hellenic Petroleum, Titan Cement (through its Luxembourg-based subsidiary), OTE telecom and Motor Oil.

Sources have told Kathimerini that major foreign lenders such as HSBC and Citigroup are continuing to hold meetings with companies forming part of the bourse’s large-cap index which have not yet proceeded to an international bond issue, as the climate is very positive, particularly for companies that appear to be more outward-looking.