BUSINESS

Greece pays higher yield to roll over 3-month T-bills

Greece sold 1.3 billion euros ($1.38 billion) of three-month Treasury bills on Wednesday, covering the amount it wanted to refinance a maturing issue, in an auction that tested its ability to raise funds amid a cash crunch.

The paper came at a higher cost as the T-bills were priced to yield 2.70 percent, up 20 basis points from 2.50 percent in a previous sale in February, the country's debt agency PDMA said.

The sale's bid-cover ratio was 1.30, unchanged from February and showing no deterioration in demand despite tight liquidity conditions.

The amount raised included 300 million euros in non-competitive bids. The settlement date for Wednesday's auction will be March 13.

Issuing short-term T-bills is the only source of commercial borrowing for the leftist government of Prime Minister Alexis Tsipras. The country's EU/IMF creditors have set a 15 billion euro cap on such issues, which has already been hit.

Athens has asked for the ceiling on outstanding T-bills to be raised as foreign investors have increasingly fled its sales in recent months, but its euro zone partners have refused on fears it would be tantamount to central bank financing of governments. [Reuters]

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