Greece Launches First Bond Sale Since 2014

Monday, July 24th, 2017
Last Update: 15:21

Greece’s government is returning to the financial markets for the first time since 2014.

It has mandated six banks to bring new five-year bonds to the markets.

The banks hired are: BNP Paribas, Bank of America Merrill Lynch, Citigroup, Deutsche Bank, Goldman Sachs and HSBC as joint lead managers for a five-year euro bond.

Reuters reports that the issue is subject to market conditions and the results of a concurrent switch and tender offer.

Greece will be speaking to investors later on today and therefore more details about how much it hopes to borrow, and on what terms will surface.

“The Republic announces today that it intends to offer new euro-denominated fixed rate notes due 2022,” according to an announcement posted on Hellenic Exchange website.

Athens has also invited holders of an existing five-year bond, due in 2019, to a switch and tender offer.

Tsipras having failed to reduce debt, now tries exit to markets

The last time Greece issued bonds was in 2014 under the coalition government of Antonis Samaras with a yield to investors of 4.95 percent.

The goal of current Prime Minister Alexis Tsipras is a lesser yield, according to reports.

Bloomberg says that with the sale, the government of Prime Minister Alexis Tsipras is seeking to chalk out a path for an exit from the current bailout program, which ends in August 2018, while also capping the country’s financing needs in 2019, expected to be about 19 billion euros.

After not being able to convince creditors to reduce its debt burden and being left out of the European Central Bank’s bond-purchase program, Greece is testing the market.

“Having failed to achieve anything substantial on debt relief or having Greece admitted into the ECB’s asset purchase program, the objective of the Syriza government is now a ‘clean exit’ when the bailout expires next year,” Mujtaba Rahman, managing director of Eurasia, said in Bloomberg.

“This will be the first leg of that strategy – to test market appetite while simultaneously building cash buffers ahead of next year.”

The announcement

 

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