Groundwork prepared for 5-yr bond

The government said yesterday it has hired five banks to help it sell five-year bonds in euros but did not specify when the sale might take place. «The transaction will be launched and priced in the near future, subject to market conditions,» the Public Debt Management Agency (PDMA) said, without giving any further details. Greece, the most indebted nation after Italy of the 16 countries using the euro, plans to borrow 43 billion euros this year, according to the government’s 2009 budget plan. Governments around Europe are selling unprecedented amounts of debt to finance bank rescues and spending programs to revive shrinking economies. Greece’s credit rating was lowered one step to A- this week by Standard & Poor’s, citing the country’s weakening finances amid global economic turbulence. That makes Greece the lowest rated country among the 16 eurozone nations. The yield spread of 10-year Greek bonds over Bunds has widened to decade highs, beyond 240 basis points. Earlier this week a 2-billion-euro issue of 13-, 26- and 52-week T-bills, Greece’s first borrowing exercise this year, was covered more than six times. PDMA said the five-year bond issue will be managed by Banca IMI, Barclays Capital, Citigroup, HSBC Holdings and the National Bank of Greece.

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