In the next few weeks Greece is set to tap the bond markets for the first time in 2021, and some very positive messages are coming from international firms regarding Greek notes.
JP Morgan and Citigroup have expressed optimism about the course of the Greek market this year and are recommending investors acquire Greek securities, expecting the Public Debt Management Agency (PDMA) to issue long-term bonds – i.e. maturing in 20 or 30 years.
Market sources say Greece will wait for the eurozone bond issue congestion which is typical in the first few weeks of January to pass before attempting its first market foray, anticipated late in January or early in February. The decisive factor will be the intentions of investors, which remain positive on Greek debt despite the historic lows the country’s bond yields have dropped to.
It remains unclear whether the first issue will concern a short- or a long-term bond. The aim of the PDMA for this year is to improve the Greek yield curve by plugging its gaps and extending its duration. That means there will be both short-term issues (five- or seven-year issues or the reopening of previous such issues) and longer ones – besides the benchmark 10-year bond, which is taken for granted, a 15-year issue is also seen as likely.
Both JP Morgan and Citigroup expect the total amount sought by the PDMA to come to 10 billion euros. JP Morgan is eyeing four or five market forays by Greece, starting with a new 10-year or even 30-year paper in January or February, while Citigroup expects four issues, starting with a 20-year paper to draw €2.5 billion as early as this month.
JP Morgan in particular recommends the acquisition of Greek bonds, stressing that there is a strong possibility of credit rating upgrades for the country this year by the major agencies, although investment grade is not seen being attained before 2022. Citigroup, for its part, says Greek bonds are among its top bets for 2021.