Yield of new Greek five-year bond set at 3.6 pct

The yield on Greece’s new five-year syndicated bond issue was set at 3.6 pct as the bookbuilding process closed on Tuesday afternoon, according to sources. The Greek state will raise 2.5 billion euros.

The bond’s annual fixed coupon was set at 3.4 pct while the issue was four times oversubscribed, with total bids exceeding 10 billion euros.

Welcoming the results of Greece’s attempt to tap the markets on Tuesday, Finance Minister Euclid Tsakalotos said the yield of the coutry’s first post-progamme five-year bond issue had “exceeded all expectations”.

The minister said it was extremely positive that several long-term investors were among those making bids to buy the syndicated five-year bond, thus greatly restricting the number of speculative funds.

Bids for the Greek bond exceeded 10 billion euros, with the Greek state raising 2.5 billion euros at a yield of 3.6 pct and an annual fixed coupon for investors of 3.45 pct.

Briefing the parliament plenary on the results of the bond issue, Tsakalotos said he was convinced this marked the start of a shift from hedge funds to normal investors.

“I had warned New Democracy and the rest of the opposition some time ago that they should not put all their eggs in the ‘we can’t tap the markets’ basket…. Today we had a successful issue, we offered the markets a five-year bond of 2.5 billion euros with a yield of 3.6 pct and a coupon below 3.5 pct. That 2.5 billion euros are 36 pct of our total demand in 2019. You will see at the Public Debt Management Agency that the plan for accessing the market was for 7.0 billion euros and today we raised 2.5 billion,” Tsakalotos said, addressing MPs.

The most important thing, he added, was that the participation of investors showed a very significant shift from hedge funds to normal investors, indicating that “from this issue, Greece is changing league.”