Two bond issues in Q1; total PBR for 2004 seen at 30 bln

Greece plans to borrow up to 15 billion euros and launch two benchmark bonds in the first quarter of the year, the head of the country’s Public Debt Management Agency (PDMA), Christophoros Sardelis, told Reuters in an interview. «We’ll borrow about 14-15 billion euros in the first quarter of the year, which will cover half of Greece’s borrowing needs for 2004,» he said. Benchmark bond issues will form the main focus of Greece’s public borrowing requirements (PBR) this year, estimated at 30 billion euros, he said. In 2003 Greece’s debt issuance totaled around 33 billion euros. A new benchmark three-year bond planned for February 3 will aim to raise about 2 billion euros and another five-year bond is slated for March. Earlier this month a 5-billion-euro, 10-year syndicated government bond attracted more than 12 billion euros of bids, with demand surpassing a German auction of more than 7 billion euros of its benchmark 10-year Bunds. Greece also plans to boost its presence in the eurozone market for inflation-linked bonds, now dominated by France. «We’ll also reopen last year’s eurozone inflation index-linked bonds which has a 2.9 percent coupon. Our goal is to double the amount to 2.5 billion euros with one issue in the first quarter. I believe it’ll be relatively easy as there is heavy demand from abroad for this bond,» said Sardelis. He said that following the debt restructuring of recent years, starting next year the bulk of Greece’s borrowing requirements to finance redemptions and coupon payments will be spread out over the second and third quarters rather than concentrated in the December-January period. «This will give us more flexibility to take advantage of favorable market conditions,» said Sardelis. Greek government bonds were among top performers in the eurozone last year, and Sardelis noted that Greek paper has a 4.5 percent weighting in the area’s government bond indices compared with their 2.7 percent share in the total debt volume. Sardelis also raised the prospects of a credit rating upgrade later in the year, possibly after general elections on March 7 and the Athens Olympic Games in August. «Greece is at a transitional stage. I believe there is scope for Greece’s credit rating to be raised this year after general elections and the conclusion of the Olympic Games.» Greece is rated A1 by Moody’s Investors Service, A+ by Standard & Poor’s and A+ by Fitch Ratings. «Regardless of which party is elected on March 7, the outlook for the Greek economy is good and structural changes are expected to move ahead,» said Sardelis. (Reuters)

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