T-bill auc­tion brings in 1.62 bil­lion eu­ros

Kathimerini English - - Business & Finance -

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.

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