Fitch: Bond swap may support market return

Fitch: Bond swap may support market return

Greece’s exchange of sovereign bonds held by private sector creditors is another step toward the resumption of regular bond issuance, Fitch Ratings said on Monday.

“Efforts to re-establish full market access would be bolstered by continued compliance with Greece’s bailout program and the prospect of official sector debt relief, both of which are assumed in Fitch’s sovereign rating assessment,” it stated.

The ratings agency noted that last month holders of 20 different bonds with an aggregate principal amount of around 25 billion euros, issued as part of Greece’s 2012 debt restructuring, agreed to swap them for five new benchmark issues.

The participation rate of close to 86 percent suggests the exchange will achieve its aim of improving liquidity in Greek sovereign bonds, supporting future market access.

Fitch also noted a report on Friday that Greece hopes to raise at least 6 billion euros in the first half of 2018 through new bond issues with maturities of between three and 10 years.

“A sustainable return to market funding would be positive for Greece’s sovereign creditworthiness. We think both Greece and its official sector creditors will aim for a ‘clean’ exit from the 86-billion-euro European Stability Mechanism program in August 2018, which we think would not entail a precautionary credit line,” Fitch concluded.