Greece taps market with seven-year bond

Greece launched a seven-year bond auction yesterday, its first attempt to tap the international markets this year. It drew strong investor demand despite upheaval in global markets.

The issue achieved a yield of 3.5 percent, against a starting rate of 3.75 percent, and was more than twice oversubscribed, attracting offers of more than 6 billion euros.

The aim of yesterday’s issue – the third since last summer – was to raise at least 3 billion euros for a cash buffer that Greece wants to have in place after its scheduled exit from the country’s third international bailout in August.

The bond auction coincided with a visit to Athens by European Economic Affairs Commissioner Pierre Moscovici, who met with government officials to discuss the prospects for Greek debt relief and the nature of post-bailout supervision by Greece’s creditors.

Moscovici said the fourth and fi- nal review of the current Greek bailout could be finalized by late June, saying it was important for the Greek government to “manage its own growth strategy.”

Greece and its creditors must agree on measures for mediumterm debt relief in June, the EU official added. “I think that in June there needs to be a global agreement on how to conclude the program but also how to handle medium-term debt measures,” Moscovici told reporters after meeting Prime Minister Alexis Tsipras.

Moscovici also met with President Prokopis Pavlopoulos and Finance Minister Euclid Tsakalotos.

Tsakalotos appeared upbeat after talks with Moscovici. “We proved today, by accessing the markets, that not only can we raise new money but that we can do it in conditions that are not ideal,” he said. Tsipras also welcomed the response from investors, referring to “huge demand.”