Over the last few months several major enterprises in Greece have drawn about 1 billion euros through the sale of corporate bonds and a large part of that was covered by money from mattresses and safe deposit boxes, according to credit sector sources.
The hidden stock of cash is estimated at tens of billions of euros. In the last big wave of deposit withdrawals, from late 2014 up to the imposition of the capital controls in mid-2015, about 40 billion euros exited the banking system. A considerable amount of that is estimated to remain in cash form while another portion has been invested in mutual funds abroad.
The climate in the market started improving in mid-April, when Athens appeared ready to compromise with its creditors so that the bailout review would be completed. Corporate bonds were seen as a good alternative to make the most of cash without returning it to the banks.
Corporate bonds offer good returns, topping 3 percent – while deposit interest rates are at historic lows – and are immune to bank risks such as the capital controls and a possible bail-in. Of course the course and repayment of corporate bonds depend on the state and progress of the companies that issued them, so they have their own risks too.