Bond brings in 3.5 bln euros

Bond brings in 3.5 bln euros

Greece’s first post-election market foray was crowned with success on Tuesday, with the issuance of the new 15-year bond garnering strong demand from investors, who priced in the country’s upcoming upgrade to investment grade.

In conjunction with the parallel exchange of two bonds maturing in the next two years, Greece remained consistent with its commitment to continued market presence while accelerating the government’s plan to ease short-term financing needs and rapidly reduce Greek debt, sending a message of confidence to the markets and also to the rating agencies. 

Therefore, in just one week, with these two moves and in combination with the announcement by Prime Minister Kyriakos Mitsotakis for the early repayment of the two installments of the bilateral loans of the first bailout, planned for mid-December, Greece achieved a very important hat trick.

The yield on the new 15-year bond stood at 4.45%, against an original guidance for 4.5%, and the coupon at 4.35%, while bids amounted to 13.4 billion euros, from which Greece drew €3.5 billion euros.

As Minister of National Economy and Finance Kostis Hatzidakis emphasized, “the results of the issue certify the arrival of investment grade for our country, which will lead to a further reduction in the borrowing costs of the economy. These developments combined – among other things – with the decision for early repayment of the bilateral loans of the first bailout, serve the government’s goal of continuing the downward trend of public debt below 140% of GDP by 2027, to which we have committed.”

The Public Debt Management Agency also proceeded with an exchange of the bond maturing on April 2, 2024, with a yield of 3.45% amounting to €2.5 billion (the 5-year bond from February 2019), and the bond maturing on February 15, 2025, with a 3.375% yield of €3 billion (of the 7-year from February 2018), priced at 100.15.

The repayment of part of the two bonds essentially pre-reduces the debt, lightening the country’s financing needs for the next two years. 

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