ECONOMY

OTE successful in 500 mln euro bond deal

OTE telecom said on Tuesday it sold 500 million euros of bonds in the biggest corporate bond deal seen in the country since last year?s bail out.

OTE, 30 percent owned by Deutsche Telekom, said it paid a 7.375 percent yield on the three-year bond issue. In contrast, the yield on Greek government two-year bonds trades at about 17 percent.

“This is the first important bond issue by any Greek company in 17 months,» said OTE’s Chief Financial Officer Kevin Copp in a statement. «The positive reception by a wide circle of investors in Europe and beyond is really encouraging,» he added.

Greece and its banks were shut out of financial markets last year after the country’s government revealed that its budget deficit was much higher than initially estimated, causing a debt crisis that spread throughout the euro zone.

But blue-chip, non-financial companies have still access to markets, even though their financing costs have increased.

“It was interesting that OTE came now as literally every day there is a rating action in the periphery,» Anke Richter credit strategist at Mizuho Securities, told Reuters, referring to euro zone countries such as Greece and Portugal.

“We’ve been seeing the sovereigns, banks and the corporates hit – a downgrade frenzy and to see a new issue in that climate was surprising and it was priced to sell.» OTE, south-east Europe’s biggest telecom, is rated ‘BB’ by Standard