Issue of new 30-year bond

PDMA is expected to make the most of the momentum generated by the S&P outlook upgrade

Armed by the surprise move from Standard & Poor's last Friday, upgrading Greece's outlook to “Positive,” the Public Debt Management Agency is on Wednesday set to make its second major market foray for 2024, with a new 30-year bond.

BNP Paribas, BofA Securities, Deutsche Bank, Goldman Sachs Bank Europe, JP Morgan and Piraeus Bank have undertaken to “run” the entire process of the syndicated issue, with the new bond set to mature on June 15, 2054.

The goal of the PDMA is to draw 2-2.5 billion euros (depending on how the offers will move), while the interest rate is expected to be above 4%.

It is noted that this is the second issuance of a similar duration after the 2008 crisis. In March 2021, a 30-year bond was also issued, with offers exceeding €26 billion and the Greek state raising €2.5 billion at an interest rate of 1.956% and a coupon of 1.875%. That was when the market was naturally dominated by very different conditions: The European Central Bank was buying government bonds in the context of quantitative easing programs (and especially the emergency – due to the pandemic – PEPP), while interest rates in the eurozone were at negative levels. The decision on the timing of the new foray and the choice of the title have everything to do with the main objective of the PDMA, which is the construction of the Greek yield curve after the recovery of investment grade. This is done either with reissues or new titles wherever deemed necessary.

After the market premiere with the 10-year in January, the agency has followed a strategy of enhancing liquidity in the secondary market – which is considered necessary to be able to satisfy the new demand from investors brought by the inclusion of Greek bonds in international indices. So the options at the moment – and since Greece's continued presence in the markets is also a goal – were two: either a new reissue of existing bonds via auction (such as last January's 10-year) or the issuance of a new bond.