The Greek state is expected to issue a new 30-year bond on Wednesday – if conditions allow it – in the country’s second market foray within 2021. This move should confirm Greece’s return to normality, as it will bear the features of a “normal market” even if the pandemic does still continue to affect the economy.
The issue of a long-maturity paper has long been on the table at the Finance Ministry and the Public Debt Management Agency, with the primary dealers recommending such a move since December. The PDMA’s argument has been that an issue not due to mature for 30 years would have to be prepared with caution so as not to put investor trust at risk.
Therefore after three months of careful planning, with the PDMA weighing conditions in the bond markets, the mood of investors and the recommendations of the lead managers, the decision has been made. An important signal came last week in the form of the European Central Bank announcement about significantly increasing the pace of bond purchases.
Furthermore, the recent swap of the old 30-year bond by the Greek systemic lenders, despite having occurred before the global bond market turbulence, constituted a provisional sign of the level the interest rate could come to, as it dropped to the historic low of 1.375%.
Four foreign lenders – BNP Paribas, Goldman Sachs Bank Europe SE, HSBC and JP Morgan – will be the joint lead managers of the issue, along with National Bank of Greece. The bond will mature in January 2025, so it will effectively last for 30 years and 10 months.
The amount to be raised has not yet been set and will be adjusted to investor demand. However, sources tell Kathimerini that the recent rise in eurozone yields means that any such paper will meet considerable demand, especially from “quality” and long-term investors, as has been the case in other long-maturity issues by countries on the eurozone periphery recently.
An amount close to 2-2.5 billion euros would in any case allow for the reopening of the issue later in the year.