Greek Gov’t: Bond Sale an Absolute Success, Opposition Derides Celebrations

Wednesday, July 26th, 2017
Last Update: 13:25

“The quality and number of investors who have shown interest in this bond issue shows that the markets started showing confidence in the Greek economy,” Finance Minister Euclid Tsakalotos said.

The Greek government is celebrating Monday’s successful bond sale claiming there is confirmation that the Greek economy is on good course.

“From now on, we are targeting August 2018 (the end of the third bailout program),” Tsakalotos said. “We know that Greek people have suffered too much, but I also think we made the first important step…There will be a second and third bond sale.”

“We can be happy with the outcome,” said Economy and Development Minister Dimitris Papadimitriou, describing a successful, targeted and strategically structured bond sale.

Greece sold 3 billion euros worth of the 2022 bond, Greek government officials and bankers said. About half of that is new money, and half is existing investors in the 2019 bond who switched, according to one of the banks managing the deal.

The new bond matures in August 2022 with a 4.625 percent yield. The 2019 bond is yielding around 3.2 percent, so investors will be paid a good premium for participating in the swap.

The coupon of the five-year bond was 4,375 percent, while yields were at 4,625 percent. Over 200 bids were made for a total of 6.5 billion euros, while the Greek government

Opposition derides government for celebrating

A statement issued by New Democracy says that “huge sacrifices were made to try to get back to where we were in 2014,” pointing out that “the country, after three years, went back to bond sales, drew a total of 3 billion euros, as in April 2014. The difference is that the amount was for a new issue and today the “new money” is about half of that.

“When they do not attack the institutions, they are attacking our intelligence,” it was the comment made by the Democratic Coalition, noting that “conditions are now much better than three years ago, and this is reflected in Portugal’s 5-year bond rate, as from 5% in 2014, declined to 1.3% today. This is proof that we have not yet come back to the 2014 agreement, which was derided by Mr. Tsipras at the time.”

The head of To Potami, Stavros Theodorakis, said that “Others borrow with a 1% interest rate; we borrow with over 4% and we celebrate.”

Evangelos Venizelos of PASOK argued that “Greece borrowed in 2014 with a spread of 435 basis points and now borrows at a spread of 481 basis points. This is more expensive.”

Popular Unity chief Panagiotis Lafazanis called the bond sale a “gift to the domestic and international profiteers.”

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