MARKETS

Successful bond reopening

PDMA raises 1.5 bln euros with its 2020 seven-year issue, with the interest secured at 2.51%

Successful bond reopening

Greece reopened its seven-year bond issue from April 2020 and successfully drew another 1.5 billion euros on Wednesday, securing an interest just over 2.5%, in what the government dubbed another “vote of confidence.”

The high international demand for the reissue, amounting to 4.8 billion euros according to a bourse filing by the Public Debt Management Agency (PDMA), resulted in the reduction of the interest rate by over five basis points from the original guidance of almost 2.57 percentage points. It settled for about 2.51%.

The bond matures on April 22, 2027. Its original issue in spring 2020 had a 2% coupon and a 2.013% interest rate.

“Greece has received a strong vote of confidence from the international markets, drawing high demand and quality of capital,” said Finance Minister Christos Staikouras: “The cost of borrowing may have been high, due to the adverse international conditions, but it is still lower than in 2019,” he said.

Greece’s return to the markets after three months came five days after the upgrading of its credit rating by Standard & Poor’s to just one notch below investment grade, in line with a March upgrade by DBRS Morningstar.

So far this year the PDMA has raised €4.5 billion on the bond markets, while its intention for the whole of 2022 is to draw €12 billion, according to the state budget.

“Having already covered a significant share of the issue program for 2022, we are maintaining the country’s cash reserves at safe levels while securing the necessary resources so as to be able to continue supporting households and corporations hurt by the increase in energy rates,” Staikouras added in his statement.

Also on Wednesday the PDMA auctioned 26-week treasury bills, raising €812.5 million, rising to €1 billion when non-competitive bids are added on Thursday. The settlement date for the transaction is this Friday.

The coverage ratio of the issue was 1.95 times, up from 1.69 times in the previous such auction on March 30, but the interest rate rose from -0.20% to -0.14% this time.