Greek firms far more solvent that the state
With the Greek economy having contracted for eight of the last nine years – 2016 included – and being deprived of the local credit lines, enterprises in Greece are finding their way back to financing through corporate bonds, while the country remains hostage to delays in the completion of the bailout review, bringing state bond yields to country default levels.
Local companies are either resorting to issuing international corporate bonds, as was the case this week with Hellenic Petroleum, or using the newly founded domestic corporate bond market, as Fourlis subsidiary Housemarket did this week.
Greece’s three-year bond was trading on Friday afternoon at a yield of 8.70 percent, while the international corporate bonds of Titan Cement, Motor Oil and OTE telecom recorded yields of 2.41 percent, 2.86 percent and 3.10 percent respectively. The only corporate bond doing worse than the sovereign debt was that of glassmaker Gioula, which was trading at a 10 percent yield, but this company has transferred its activity abroad.
Up to July 2020 seven Athens-listed companies will have to refinance bonds with a nominal value of 4.075 billion euros.
On Friday Hellenic Petroleum announced that its new international five-year bond issue was fully covered by foreign and Greek investors. The ATHEX blue chip company drew 375 million euros at a rate of 4.875 percent, while new investors filled the book with offers up to 700 million euros. A considerable part of the demand came from the holders of the existing bonds that mature in May 2017 with an 8 percent yield. The funds drawn will be used partly for the buyback of the bonds that expire next year, and partly for the repayment of the group’s other existing bond obligations.
Fourlis Group introduced the five-year corporate bond of Housemarket on the new corporate bond market of the Athens Exchange this week. It listed 40 million bonds worth 1 euro each with a 5 percent fixed annual yield and a BB credit rating.
In July MLS Informatics issued bonds of four-plus-one years with a nominal value of 4 million euros and an annual rate of 5.3 percent.