T-bill auction brings in 1.62 billion euros
Greece raised 1.62 billion euros in a treasury bill sale yesterday, a day after it was accorded the lowest sovereign credit rating in the world over fears private investors will be invited to share the burden of a potential Greek restructuring.
The Public Debt Management Agency (PDMA) said the sale of 26week T-bills carried a higher interest rate of 4.96 percent, compared to 4.88 percent in the previ- ous debt sale of the same maturity last month. The agency had initially sought to raise 1.25 billion euros but accepted a further 375 million euros in additional bids.
The sale was oversubscribed 2.58 times, while last month’s was oversubscribed 3.58 times. Sources said that foreign investors took up 37 percent of Tbills sold.
The auction came as markets were assessing the impact of Standard & Poor’s slash the country’s B to CCC.
Greece’s public debt is expected to reach 350 billion euros this year, or more than 150 percent of gross domestic product, and it looks highly unlikely that Athens will be able to meet all of its obligations on time.
Standard & Poor’s warned of the likelihood of one or more defaults as the country grapples to decision to rating from meet its financing requirements.
Meanwhile, Spain and Italy also faced higher borrowing costs at debt auctions yesterday.
Spain sold 5.4 billion euros of 12-and 18-month treasury bills, just below the maximum target of 5.5 billion euros, and its 12-month borrowing costs rose to 2.695 percent from 2.546 percent in May.
Italy auctioned 3.5 billion euros of five-year bonds at 3.9 percent, up from 3.77 percent last month.