ECONOMY

Four new state bonds in 2002

LONDON – Greece plans four new government bonds of three, five, 10 and 20 years’ maturity in 2002, as it seeks to establish itself as a benchmark issuer of government bonds in the eurozone, a senior official said yesterday. The country has already started borrowing, launching a 5-billion-euro bond due May 2012 on Monday. Christoforos Sardelis, director-general of the Public Debt Management Agency, said Greece, which borrows as the Hellenic Republic, also planned to syndicate a 4-billion-euro five-year bond in February. A 20-year bond of a similar size will follow, probably in the second quarter. Sardelis told Reuters Greece was likely to reopen the 2012 bond via two auctions this year, targeting a size of between 7.5 and 8 billion euros, in line with a long-term plan to ensure that at least 80 percent of its debt is in the form of liquid benchmarks. Greece may also also reopen the other bonds planned for 2002. «We want to offer the market sufficient debt across all maturities and this year are going to work on four segments of the curve – three-year, five-year, 10-year, which we are doing now, and the 20-year,» Sardelis said. «The minimum liquidity we have in our mind is 5 billion euros. The average size of each issue is going to be 6 to 7 billion (while) several issues will be… 7.5 or 8 billion.» All but the three-year bonds are to be sold via a syndicate of banks rather than at an auction. Syndication is used by smaller eurozone states to maximize potential demand for their bonds, which might otherwise be overlooked in favor of debt issued by their larger neighbors. Sardelis said the 5-billion-euro, 5.25-percent, 10-year bond Greece launched on Monday had attracted bids totaling 7.5 billion euros. Lead managers Credit Suisse First Boston, EFG Eurobank, JP Morgan, National Bank of Greece and San Paolo IMI offered a yield premium of 38 basis points over benchmark German Bunds. Syndicate officials from the banks said they were pleased they had been able to maintain the indicated yield premium in the face of volatility in government bond yields and further supply at the 10-year maturity. Austria sold a 5-billion-euro 10-year bond via a syndicate of banks on Tuesday. Belgium also plans to syndicate a 10-year bond in the near future. Pension funds, insurance companies and government bond funds were buying the bond, they said, consolidating the market’s acceptance of Greece as a sovereign issuer. Previous issues have been of interest to buyers primarily interested in credit. «While in the previous transactions the primary target we had was to establish and consolidate a certain level of spread, this time the overriding target is to broaden the investor base,» Sardelis said. Greece’s debt strategy involves raising more funds than it needs so it can provide the market with liquid issues and use some of the proceeds to buy back non-liquid outstanding bonds. -On smaller sizes, Van Ommeren Clipper has fixed M/V «Costas» 38,054 dwt, built 1983, delivery Venezuela Jan. 15-20, redelivery Portugal, at USD 8,000 daily.