Greece raises €3.5 bln from 15-year bond sale

Greece raises €3.5 bln from 15-year bond sale

Greece on Tuesday raised 3.5 billion euros in cash and bonds from a new 15-year bond issue, its debt agency said, marking the nation’s first bond sale since June’s national election.

Investor demand topped 13 billion euros and the final pricing was set at mid-swaps plus 125 basis points, a yield of about 4.42%, the Public Debt Management Agency said in a filing.

The bond issue is the country’s first since Prime Minister Kyriakos Mitsotakis’ centre-right New Democracy party was re-elected last month.

BNP Paribas, BofA Securities, Deutsche Bank, Goldman Sachs Bank Europe SE, JP Morgan and National Bank of Greece were appointed lead managers for the bond, which matures in July 2038, Greece said on Monday.

Greece mandated the same banks as joint dealer managers on a concurrent switch and tender offer on its EUR 3.450% notes due in 2024 and EUR 3.375% notes due in 2025.

Investors were invited to voluntarily swap the bonds they held with the new 15-year bond or with cash. Out of the 3.5 billion euros raised on Tuesday, 1.5 billion euros came from such bond exchanges, the debt agency said.

Kostas Boukas, asset manager at Beta Securities in Athens, said the government had extended the maturity of its debt, reduced its financing needs and mitigated risks stemming from higher interest rates via the sale.

Greece had already covered this year’s borrowing needs. It will now see its gross financing requirement drop to 5.5 billion euros annually in 2024 and 2025, down from about 9 billion euros before the sale, a finance ministry official told Reuters.

Mitsotakis won the support needed in June’s election to push ahead with his economic plan in a nation still dealing with the impacts of a huge debt crisis and three international bailouts.

He has pledged to deliver robust growth, an investment-grade credit rating and to repay about 5.5 billion euros of bilateral bailout loans ahead of schedule. [Reuters]

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