Greece received offers of 19 billion euros for the simultaneous reissue of a 5- and a 30-year bond during a book-building process on Wednesday, with the Greek State drawing 2.5 billion euros – 1 billion from the 30-year bond at 1.67% interest and 1.5 billion euros from the 5-year bond, at a nearly zero interest rate.
It was the fifth time that Greece taps the markets since early 2021. The Greek State has raised from the markets about 11.5 billion euros, thus covering the goal of the loan programme that had been set for this year. The specific goal that was set with the submission of the budget was based on different data from those created after the pandemic, however: At the time, the relief package for the repercussion of the pandemic crisis was assessed at 7.5 billion euros, while it has now exceeded 15 billion euros.
The government had instructed Alpha Bank, Barclays, Citi, Commerzbank and Morgan Stanley to reissue the bond maturing on February 12, 2026 with a coupon at 0 pct and a bond maturing on January 24, 2052 with a coupon of 1.875 pct.
Finance Minister Christos Staikouras said the simultaneous issue of two bonds was highly successful with a very strong demand, something that is unprecedented.
“This double tapping of the markets, from which the Greek State drew 2.5 billion euros in total, took place despite the fact that this year’s target of the borrowing program is covered,” Staikouras noted in a statement. “But this increased demand for Greek bonds, particularly by a large segment of institutional investors, provided the country the opportunity to improve the liquidity of the yield curve at two more points, drawing at the same time capital with particularly favorable terms.”
The 5-year bond’s reissue with nearly 0 interest is a new historic low, regardless of duration, while that of the 30-year bond was with a lower interest rate than the previous issue in March 2021. Since New Democracy has come to power, Staikouras said, Greece has drawn a total of 30 billion euros from the markets, of which 235. billion euros were during the pandemic.
“Therefore, despite rising difficulties and unprecedented uncertainty on a global level, we have managed to keep the country’s cash resources at a safe level,” the Finance Minister said.