The year 2019 could be named “the year of Greek bonds,” as institutional investors returned en masse to the secondary market and bond prices rose on average by 25 percent.
Turnover in the year just ended rose by 70 pct, topping 8.5 billion euros, despite the fact that state bonds are excluded from the European Central Bank’s quantitative easing program.
Yields for all bonds, regardless of duration, shrank, leading to a drop in cost of lending for the state of nearly 3 pct.
These factors created the conditions that could allow Greece to return to the markets in 2020 in order to borrow between 4 billion and 8 billion euros.
Already within 2019, and despite restrictions on Greek banks on the ceiling for investing in domestic state bonds, the Greek state raised 9 billion euros from markets, concluding successfully four issues: for 10-year bonds (twice), 7-year and 5-year bonds. Strong interest for these brought offers of 49 billion euros, and contributed to the rise of prices with a simultaneous drop in yields.
A drop in yields significantly improved the viability of public debt and brought profits to investors, who placed over 8.5 billion euros in the secondary market.
At the start of 2020, the Greek state also includes among its strengths reserves of nearly 32 billion euros (corresponding to the bond maturity dates for the next four years) and is preparing the issue of new bonds.