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May 26, 2017

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Greece returns to bond market after four-year absence

ATHENS -- Bailed-out Greece returned to bond markets with a bang on Thursday after a four-year exclusion, raising 3.0 billion euros and sending a major signal that the eurozone debt crisis is fading.

"The Hellenic Republic today announces that it has agreed to sell a five-year bond in a principal amount of 3.0 billion euros with an annual coupon of 4.75 percent," the finance ministry said in a statement.

"Demand for the bonds was very strong. The participation of long-term investors outside Greece is expected to approach 90 percent," it added.

The bonds have a life of five years, and this return to the medium-term debt market is a milestone for recession-scarred Greece which is still suffering deeply from the effects of the crisis and resulting reforms.

Deputy Prime Minister Evangelos Venizelos told reporters that the sale had been "at least eight times oversubscribed" and hailed it as "a huge success."

Reports and analysts had earlier said Greece had paid interest of 4.95 percent.

The last issue of five-year bonds four years ago carried an interest rate of 6.1 percent.

The sale is a big step in Greece's financial resurrection after two EU-IMF bailouts.

"One year earlier, nobody would expect (Greece) to stage such a fast return to international markets," said Platon Monokroussos, chief market economist at Greece's Eurobank, adding that he expected another debt sale in the second half of 2014.

The auction is "a reflection of a tremendous process" to stabilize the economy and drive down deficits, added the analyst.

Another analyst said the appetite for the Greek sale had been "jaw-dropping."

It was timed a day before a scheduled visit by German Chancellor Angela Merkel, and originally aimed to raise 2.5 billion euros (US$3.6 billion).

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