By Sotiris Nikas & Yiannis Papadoyiannis
The country’s return to the international money markets with a new bond issue is the next big challenge for the government after its agreement with its creditors on Tuesday.
Prime Minister Antonis Samaras wants the new bond to be issued “as soon as possible,” according to officials familiar with the matter, and this could take place at the end of April.
The optimism for a rapid return to the markets has three key sources: The main obstacle of the inconclusive talks with the creditors has been removed, the financing gap for the Greek program has been covered for the next 12 months (otherwise the International Monetary Fund would not have given its consent for the monitoring to be concluded), and investors are showing strong interest.
Yields on the benchmark 10-year bond dropped to 6.8 percent on Tuesday from 7.2 percent last Friday, while the three-month treasury bills auctioned saw their interest rate fall to 3.10 percent, from 3.60 percent last month.
A top Finance Ministry official however made it clear the bond issue will be a test, and is not intended to cover Greek funding needs. It will aim at forming a better climate for Greek bonds concerning their negotiation in the secondary market.
Meanwhile, Piraeus Bank had a very successful bond issue on Tuesday that was six times oversubscribed. The interest rate came to just over 5 percent, which was much lower than the market had expected. For an issue of 500 million euros there were offers adding up to 3 billion euros, meaning that the process proved particularly short. It involved no fewer than 240 institutional investors from 25 countries.
Senior Piraeus officials told Kathimerini that this successful return to the money markets served as a strong vote of confidence not only for the group and the local credit system but also the economy and the country’s prospects.
Sources say that National Bank will soon go ahead with a bond issue of its own, making the most of the favorable climate.