Greece is lining up a 2bn five-year bond sale to take place in April via lead banks Deutsche Bank, Bank of America Merrill Lynch, JP Morgan and Goldman Sachs, two sources with knowledge of the matter said on Thursday.
The Greek finance ministry has been meeting bankers over the past week for discussions on a groundbreaking return to the market two years after it restructured 130bn of sovereign debt.
“This is the most important deal Greece will do,» said one banker.
The exact timing is still to be determined and it is possible that the final list of banks could change, both sources said.
Greek Finance Minister Yannis Stournaras told Reuters on Wednesday that Greece’s first foray into bond markets after a four-year exclusion would be on a «trial and error» basis but the nation expects to fund itself unaided in 2016.
“The mood has changed dramatically recently. Simply look at what happened at Eurogroup – everybody thinks that Greece now is out of the woods,» Stournaras said.
Greece’s bond yields have fallen dramatically since the restructuring in February 2012. The 2% bond due February 2023 is now quoted at a cash price of 80.5-81.5, equating to a yield of 6.08%-5.90%. The bond traded as low as 14 in price terms for a yield of 31% in June 2012.
The Eurogroup of finance ministers met in Athens this week after the EU and IMF finally agreed a programme with Athens to allow bailout funds to keep flowing. Stournaras said Greece did not need additional financing beyond its current bailout for the next year, and hoped it would not need fresh aid for the year after that.
A series of Greek companies have issued debt recently. The country’s largest bank, Piraeus, successfully sold 500m of three-year debt in March. Greek utility PPC plans to sell 300m, Reuters reported on Thursday.
Economic data has begun to show signs that a six-year recession is ending, and the government posted a budget surplus before interest payments last year, making it eligible for further debt relief from its partners. That may take the form of extending repayment terms on existing bailout loans and lowering interest rates, rather than injecting fresh funds.