Greece set to stay in markets

Greece set to stay in markets

Issue of 10-year bond attracts bids over 15 bln euros and confirms investor confidence

Greece’s first market foray for 2022, with a 10-year bond issue, offered a twin message: that the very low cost of borrowing is now a thing of the past, which is the case for all countries, and that Greece is still a normal issuer, even in a difficult period such as this.

That means investors are still showing confidence in the country, but also that this new era of higher financing costs requires a very cautious fiscal policy, following two years of easing due to the pandemic, which has driven the Greek debt-to-gross domestic product ratio above 200%.

The Greek state has raised 3 billion euros, expanding its cash buffer to €40.7 billion, at an interest rate of 1.83%; that is clearly far higher than last year, but still well below the period before the pandemic, in what currently is a tough time for the markets.

As Danske Bank’s chief bond analyst Jens Peter Sorensen noted to Kathimerini, “That was a decent issue with an absolutely reasonable timing, despite conditions.”

The high uncertainty resulting from the successive waves of the pandemic, the rise in inflation and central banks’ swing to a tighter monetary policy have created a new market landscape, with yields steadily on the rise.

In that context, the Greek 10-year paper enjoyed quite strong demand that topped €15 billion, although it was around half of that recorded last June, at the reopening of last year’s 10-year issue – that is also a trend recorded by other countries making market forays, such as Italy and Portugal.

The original guidance of Wednesday’s issue was set at 1.89% and at 145 basis points plus mid-swap, but that went down by five basis points, with the coupon eventually settling for 1.75%.

ING strategic analyst Antoine Bouvet told Kathimerini that Greece did the right thing choosing to hit the markets now, before the board meetings of the European Central Bank and the Fed, while regular and steady forays under any conditions create a profile of a proper issuer, he added.


Previous Next
Test Caption
Test Description goes like this
Cookies Preferences
Choose Type of Cookies You Accept Using

These cookies are required for the website to run and cannot be switched off. Such cookie are only set in response to actions made by you such as language, currency, login session, privacy preferences. You can set your browser to block these cookies but our site may not work then.

These cookies allow us to measure visitors traffic and see traffic sources by collecting information in data sets. They also help us understand which products and actions are more popular than others.

These cookies are usually set by our marketing and advertising partners. They may be used by them to build a profile of your interest and later show you relevant ads. If you do not allow these cookies you will not experience targeted ads for your interests.