Seven-year bond issue next week

Seven-year bond issue next week

Greece is moving ahead with its first market foray since the general election with a new seven-year bond issue, probably next week.

Sources told Kathimerini that the Finance Ministry has authorized the Public Debt Management Agency (PDMA) to launch the process for a new issue, so as to make the most of a favorable climate regarding the Greek economy’s prospects, as evidenced by a flurry of positive reports from international firms this week.

Market conditions permitting, the announcement will take place on Monday, July 15, with bookbuilding starting the following day. The aim is to draw 2.5 billion euros at a rate of below 2 percent, thereby overshooting the PDMA’s annual target of drawing 7 billion from the markets in 2019, since 5 billion euros has already been drawn this year.

Even so, there may also be further issues later in the year, after the five- and 10-year paper that has already been issued.

The new seven-year bond issue will be run by six international banks: Morgan Stanley, Deutsche Bank, Nomura, Bank of Aamerica, Barclays and Societe Generale.

Analysts point out that there is important window of opportunity at the moment for a new Greek bond that should not be missed, due to the positive atmosphere in international markets from expectations for the loosening of monetary policies, combined with the election of the center-right New Democracy in power in Greece, generating hopes for growth and reforms.

Gianluca Ziglio, senior fixed income analyst at Continuum Economics, tells Kathimerini that a new seven-year bond is a good point between the five-year and the 10-year notes already issued this year so as to bridge the gap in the Greek yield curve.

Japanese financial services firm Nomura commented a few days ago that Greece finds itself in an unusually favorable position, where a new state bond issue would be seen positively by the markets as it will increase liquidity and attract a greater investor base.

It is estimated that another window of opportunity will open in September or October.

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