Greece to borrow 5.5 bln euros

Greece plans to tap capital markets for about -5.5 billion between July and September, the head of the country’s debt management agency (PDMA) said yesterday. «We will seek to raise about -5.5 billion in the third quarter. We will reopen the 10-year July 2017 benchmark bond and the 15-year bond, expiring in March 2024,» Spyros Papanicolaou, PDMA chief, told Reuters in an interview. The PDMA will also reopen a five-year August 2012 bond in the third quarter, along with an issue of T-bills, he said. Greece has said it would borrow about -35 billion this year – about -4 billion more than in 2006 – to refinance maturing debt issued in previous years. Greece’s public finances are strained by one of the 13-member eurozone’s biggest debt loads. It is struggling to reduce its debt to 100.4 percent of GDP this year from 104.3 percent in 2006. This does not take into account a 25 percent upward revision in GDP that Greece is hoping will be approved by Eurostat in Brussels. Economists say this would bring the Greek debt down to about 80 percent of GDP. The government, which aims for a balanced budget by 2010, expects to cut the budget deficit to 2.4 percent of GDP this year. Papanicolaou said Greece’s borrowing this year will have reached about -25.6 billion by early June, including the reopening a five-year government paper next week. This will leave about -3.9 billion for the last quarter. «Our borrowing plans for the remainder of the year do not include the issue of new benchmark bonds,» Papanicolaou said. He added that Greece’s credit rating will likely be upgraded, a view he has expressed in the past. «I think it is probable that some time in 2008 there will be an upgrade,» Papanicolaou said, «provided there is sustained improvement in the debt and fiscal gap.» (Reuters)