Ten-year bond issue after nine years taps into improved climate


Greece is set to issue its first 10-year bond in nine years on Tuesday, in an effort to capitalize on the significant improvement in the climate for Greek assets as well as Moody’s two-notch credit rating upgrade last Friday.

The Public Debt Management Agency announced on Monday that three US and three European banks had been appointed to be the joint lead managers of the issue: They are BNP Paribas, Citi, Credit Suisse, Goldman Sachs, HSBC and JP Morgan.

The PDMA statement spoke on Monday of an issue to take place “in the near future,” depending on conditions in the markets, but Kathimerini understands the offers book will open today with the aim of raising about 2 billion euros, close to the amount drawn with the recent five-year bond issue. As was the case with that note, the PDMA intends to draw quality bids, with a long-term horizon, and will tread carefully, offering an attractive yield.

Consequently the interest rate today is expected to come close to 4 percent. The yield of the nine-year (formerly 10-year) bond maturing on January 30, 2028 was at 3.68 percent on Monday night. That would put the 10-year yield at around 3.85 percent.

The last time Greece tapped the money markets with a 10-year bond was on March 11, 2010, just before the country knocked on the door of the International Monetary Fund for its first bailout. It then drew 5 billion euros from the market at a rate of 6.25 percent.

Market professionals consider Athens’s new market foray as a very positive development, especially since this is with a benchmark issue. As a senior official at a Greek systemic bank told Kathimerini, the anticipated success of this issue will improve the climate for attracting investors in the long term. That should also have a positive impact on bank stocks and lenders’ efforts to sell their bad-loan portfolios to foreign funds.

Analysts say the sovereign rating upgrade by Moody’s from B3 to B1 was decisive in Greece implementing the issue this week, as it boosted market confidence in the country.