Citigroup anticipates multiple credit rating upgrades for Greece this year by the four main agencies (Moody’s, Standard & Poor’s, Fitch and DBRS Morningstar), estimating that the country will make four bond market forays to draw a total of 10 billion euros in 2020. It therefore appears that it will be a key year for Greece in its mission to reclaim investment grade, with Athens targeting the first half of 2021 for that goal.
Citi notes in a report that Greece and Portugal are expected to stand out this year, coming under the market spotlight as they are seen bagging the biggest number of rating upgrades, starting very early in the year.
For Greece in particular, Citi says it expects a substantial number of upgrades by the four agencies this year, helping the country climb up several credit rating notches, given its strong fundamentals, which will bring Greek government bonds to the verge of qualifying for the European Central Bank’s quantitative easing program (QE) and investment grade.
At the moment, according to S&P, Fitch and DBRS Morningstar, Greece stands three notches below investment grade, while Moody’s puts that figure at four.
The local market has high expectations of the Fitch assessment due on January 24, as the agency has not changed Greece’s rating since 2018. Another Fitch rating action is scheduled for July 24.
A key date will be April 24, when both S&P and Moody’s are set to issue their verdict on the Greek rating, which they will repeat on October 23. Moody’s – the strictest of the four agencies for Greece – will issue its verdicts on the country on May 8 and November 6 this year.
According to Citi’s estimates, the Public Debt Management Agency will draw a total of 10 billion euros from the market this year, far above the 4-8 billion mentioned in the PDMA borrowing program for 2020. The US bank argues Greece will issue a seven-year bond this month before a 10-year note in March, a five-year paper in June and another 10-year one in September.