As of this summer, if the vaccination targets are met, the Public Debt Management Agency will keep creating excess liquidity at every opportunity to finance further moves for the optimum management of the national debt.
This will include the payment of the eurozone loans Greece received in the context of the first bailout program in 2010, with the PDMA set to opt for new bond issues.
The support measures for the economy, which add up to almost 15 billion euros, will have been completed by end-June or July at the latest, while this summer should see cash inflows in the Greek economy.
Some €2.5 billion is expected from the European Union employment support program SURE, another €4 billion from the Next Generation EU fund and €1.3 billion from eurozone central banks’ earnings from their Greek bond holdings (SMPs and ANFAs) in two installments, for a total figure of almost €8 billion.
With the support measures funding out of the way, the PDMA will have an open road for state debt management without any pressure. With the strong presence of the European Central Bank, which will acquire Greek bonds worth another €12 billion by year-end, the PDMA will take any opportunity that arises to improve the profile of the Greek debt.
The next market foray is expected very soon. By June, and possibly in May, Greece will have hit the markets once or – if conditions allow it – even twice. This is thanks to the ECB proceeding in the current quarter with significantly increased Greek bond purchases through its PEPP program, as it has announced, probably because Greece did not benefit from its original QE program.
The PDMA has many options: The reopening of the 30-year bond has been ruled out, as it is estimated that some time ought be granted to traders for absorbing the new paper in the secondary market, whose original duration was in fact 31.5 years – therefore it may also be reopened in 2022 and still constitute a 30-year debt.
It is more likely that the 10-year bond issued in January will be reopened, or even the recent 15-year paper, which would enhance liquidity, as well as the issue of a new bond of five of seven years, with a 7-year paper being the most likely, according to analysts.