Greece on Tuesday sold 3-month treasury paper at the cheapest borrowing cost since its debt crisis escalated in early 2010, with foreign investors buying up half of the issue.
The country’s debt agency, PDMA, sold 1.3 billion euros ($1.81 billion) of three-month T-bills to refinance a maturing issue at a yield of 3.10 percent, down 50 basis points from a February auction.
It was the lowest funding cost on 3-month T-bills since January 2010, when the agency sold similar paper at 1.67 percent, a PDMA official said.
“There has been rising foreign interest in the last auctions,” the official said. “Foreign take-up of treasury issues in the last three months has hovered around 40 percent.”
Greece lost access to bond markets three years ago, when its debt crisis erupted. Monthly T-bill sales are its sole source of market funding. The government is eyeing a return to bond markets in the second half of this year.
Piraeus Bank will become on Tuesday the first Greek lender to tap bond markets since 2009.
The correction of fiscal imbalances and signs that the country’s battered economy is likely to recover from a six-year recession this year have helped drive Greece’s 10-year yields to their lowest since its first bailout.
The sale’s bid-cover ratio was 2.38, unchanged from the previous sale. The amount raised included 300 million euros in non-competitive bids. The settlement date for Tuesday’s auction will be March 21.
Athens has a stock of about 15 billion euros of T-bills, which it regularly refinances with the help of Greek banks, which buy and then deposit them as collateral to draw liquidity from the ECB. [Reuters]