Greece’s 2014 bond issue will be small, says Stournaras

Greece plans to end its four-year exclusion from debt markets with a small bond issue next year, the country’s finance minister Yannis Stournaras told Reuters on Wednesday.

Encouraged by falling bond yields amid growing market sentiment that his country will remain in the euro zone, Prime Minister Antonis Samaras said earlier this month he was planning a bond sale in the first half of 2014.

Asked on Reuters Insider to comment on the size of the issue, Stournaras said: «It will be small». He added he was not sure if it would happen in the first or the second half of the year. Greece is slated to receive its final bailout payment in the last quarter of 2014.

The country did not need to raise a large amount, Stournaras said, because debt relief measures Athens obtained by the European Union and the International Monetary Fund have significantly smoothened its debt profile.

“Interest payments have fallen a lot, a lot of amortisation was pushed to the future, so it’s (the bond issue) going to be small,» he said.

According to ThomsonReuters data, about 40 percent of Greece’s outstanding debt falls due in 2042.

The euro zone, which holds most of the country’s sovereign debt, agreed late last year to lower the interest rate and extend the maturities on the 240 billion euros of rescue loans Athens has obtained since mid-2010 to avoid bankruptcy and a chaotic euro zone exit.

Ireland and Portugal, which also obtained EU/IMF rescue loans, have already managed to sell long-term debt again, moving closer to a bailout exit.

Greek 10-year bond yields dropped below 9 percent earlier this month, according to TradeWeb data, hitting their lowest level since October 2010. They had risen to 41 percent in March 2012, when Athens restructured its privately-held bonds.