Greece announces new bond issue ending three-year market exile

Calvin Saunders
July 26, 2017

The Greek news agency ANA said that initial transactions for the five-year government bonds put the yield - the financing cost for the government or the rate of return for investors - at 4.875 percent.

Greece last ventured into global bond markets with two issues in 2014, a year before then newly elected Prime Minister Alexis Tsipras signed up to a new bailout, the country's third since 2010, after months of tense negotiations with the European Union and the worldwide Monetary Fund.

European Union economy commissioner Pierre Moscovici, who is visiting Athens, said Tuesday that the country is making a "spectacular recovery" that should allow it to "progressively return" to the debt markets, according to a statement released by the office of Greek President Prokopis Pavlopoulos after the two met.

Greece broke a three-year dry spell with a successful return to the debt markets on Tuesday, a symbolic victory for the beleaguered eurozone nation.

The Greek finance ministry has set a goal of a 4.2% interest rate on the new bond.

The auction of five-year government bond is being overseen by a consortium of leading bankers from BNP Paribas, Citigroup, Deutsche Bank, Goldman Sachs, HSBC and Merrill Lynch.

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The bond issue, which raised 3 billion euros, is "the most important message and the most significant step in order to finish this unpleasant adventure of the memorandum", he said in comments ahead of talks with visiting European Economic and Monetary Affairs Commissioner Pierre Moscovici.

Its return to the markets had been predicted over recent weeks, after the country's largest creditor - the European Stability Mechanism - said last month that Greece should develop a strategy to end its three-month exile.

Earlier this month, eurozone finance ministers approved the latest 8.5 billion-euro ($9.9-billion) disbursement from its third global bailout, just in time for Athens to meet major debt repayments.

The fund said however it would not release any funds until the eurozone agreed on a deal to cut Greece's colossal 314-billion-euro debt burden.

Earlier this month, eurozone finance ministers approved the latest 8.5-billion-euro ($9.9-billion) disbursement of the current bailout package, just in time for Athens to meet the deadline for major debt repayments.

But the clash with borrowers killed off a nascent recovery, with the Greek economy stagnating in 2016, although it is expected to post modest growth of 2.1 percent this year.

Other reports by MaliBehiribAe

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