Banks pre­pare to is­sue bonds of their own

Kathimerini English - - Focus - YIANNIS PAPADOYIANNIS

Greek banks are pre­par­ing their own bond is­sues fol­low­ing the coun­try’s suc­cess­ful re­turn to the mar­kets af­ter three years.

Lo­cal lenders are plan­ning to is­sue bonds right af­ter the sum­mer in a bid to strengthen their cash flow and make their own re­turn to in­ter­na­tional mar­kets. A sim­i­lar move took place in 2014 af­ter the sov­er­eign bonds is­sued then, and it should be noted that banks se­cured a bet­ter yield then than that of the Greek state in their first re­turn to the mar­kets since 2009.

Now banks are plan­ning to come back to the bond mar­kets for a sec­ond time, aim­ing to draw more than 1 bil­lion eu­ros. They are also pre­par­ing to is­sue cov­ered bonds – i.e. bonds cov­ered by loan port­fo­lios. Th­ese is­sues are in­tended to help lo­cal banks to draw liq­uid­ity that would re­duce their de­pen­dence on emer­gency liq­uid­ity as­sis­tance (ELA) from the Eurosys- tem. At the end of June banks’ de­pen­dence on ELA fell to 37.9 bil­lion eu­ros, from 65.1 bil­lion at end2016.

Of course ev­ery­thing de­pends on the gen­eral course of the econ­omy and the con­sol­i­da­tion of the pos­i­tive at­mos­phere. Bank of­fi­cials stress that the sov­er­eign bond is­sue has to be com­bined with more struc­tural re­forms and pri­va­ti­za­tions.

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