MARKETS

Record low bond interest rate

record-low-bond-interest-rate

Greece successfully tapped the bond markets on Wednesday for the third time within 2021, as its five-year issue drew bids of more than 20 billion euros and secured a very low interest rate of just 0.20%, down from an original guidance for 0.28%.

In Greece’s third market foray this year, the Public Debt Management Agency (PDMA) raised €3 billion, capitalizing on the country’s recent credit rating upgrade by Standard & Poor’s.

Finance Minister Christos Staikouras commented on Wednesday that this record low interest rate constitutes yet another vote of confidence in the Greek economy and its prospects, noting that the previous five-year issue, by the government of Alexis Tsipras in 2019, had reached a 3.6% interest rate. “Today’s issue also had a major coverage ratio and an excellent quality,” he said referring to the origin of the bids submitted.

Also on Wednesday the PDMA raised another €812.5 million, set to become €1 billion by today with non-competitive bids, through the issue of new 13-week treasury bills at a negative interest rate of 0.40%, also a historic low, from -0.32% in the previous such auction on April 7. The issue enjoyed a coverage ratio of 1.98.