Greece Issues New 10-Year Bond

Bond sale Greece
Tight demand for the 10-year bond issued by Greece. Credit: Greek Reporter

Greece issued a new 10-year bond on Wednesday with offers exceeding 11 billion euros within the first few hours of the process, sources told the Athens-Macedonia News Agency (AMNA).

The interest rate of the issue fell from 1.89 percent to 1.83 percent at Wednesday noon.

The demand, which is not final and could increase before the sale closes, is less than half the 30 billion euros Greece received for its last 10-year bond sale last June.

Grecian Delight supports Greece

Then Greece received its strongest-ever demand for a bond sale and cemented its place as one of Europe’s most sought-after borrowers. Greece drummed up 30 billion euros of offers for its 2.5 billion-euro ($3.1 billion) sale of bonds due in 2031.

The Public Debt Management Agency on Tuesday requested that six banks (Barclays, Commerzbank, Eurobank, Morgan Stanley, Nomura and Societe Generale) be the book runners of the issue.

Greece’s Public Debt Management Authority plans to issue new bonds worth at least 12 billion euros this year, down from 14 billion in 2021, in a move aimed to highlight that Greece is able to borrow at competitive terms.

The 10-year paper issued in January 2021, maturing in June 2031, had a historically low-interest rate of 0.807 percent and a coupon of 0.75 percent, with its reopening last summer leading to a yield of 0.88 percent.

Greece’s bond sale “reflects the increase in yields across Europe”

“The higher cost reflects the increase in yields across Europe,” Kostas Boukas, head of asset management at Beta Securities in Athens, told Reuters.

“The environment is different than last year as a result of higher inflation and policy change from central banks.”

The bond sale is the country’s first this year and follows a revision of the country’s BB credit rating outlook to positive last Friday by Fitch Ratings.

Last week, credit ratings company Fitch bumped Greece’s credit outlook from stable to positive. The country’s rating remains at BB, which is two ranks below investment grade.

Fitch estimated in its new report that Greece’s economy grew 8.3 percent in 2021, almost double the 4.3 percent forecast the company had given it in July.

Eurostat reported last month that Greece had the largest gross domestic product (GDP) growth rate in the third quarter of 2021 in the entire Eurozone.

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