Greece read­ies first foray into bond mar­ket in three years

Kuwait Times - - BUSINESS -

Greece will make its first re­turn to the debt mar­kets in three years to­day, test­ing the waters to see if it can be­gin to wean it­self off bailout loans af­ter tough re­forms.

Athens “an­nounces to­day that it in­tends to of­fer new euro-de­nom­i­nated fixed rate notes due 2022,” the fi­nance min­istry said in a state­ment yes­ter­day. “Pric­ing of the new notes of­fer­ing is ex­pected to oc­cur on 25 July 2017, sub­ject to mar­ket con­di­tions, with set­tle­ment ex­pected to oc­cur on 1 Au­gust 2017,” the min­istry said. BNP Paribas, Cit­i­group, Deutsche Bank, Gold­man Sachs, HSBC and Mer­rill Lynch have been picked to han­dle the five-year sale, the min­istry said.

Athens has also in­vited hold­ers of an ex­ist­ing five-year bond, due in 2019, to a switch and ten­der of­fer. “The cash pur­chase price to be paid for (the ex­ist­ing 2014 bond) will be equal to 102.6 per­cent of the nom­i­nal amount,” the min­istry said. The last time Greece is­sued bonds was in 2014 un­der the coali­tion govern­ment of An­to­nis Sa­ma­ras with a yield to in­vestors of 4.95 per­cent. The goal of cur­rent Prime Min­is­ter Alexis Tsipras is a lesser yield, ac­cord­ing to re­ports. Greece cur­rently has no need to draw money from the bond mar­kets-but it is a nec­es­sary psy­cho­log­i­cal mile­stone.

The Euro­pean Sta­bil­ity Mech­a­nism (ESM) will keep feed­ing the debt-rid­den coun­try with low in­ter­est rate loans (0.8 and 1.8 per­cent) un­til the end of the bailout pro­gram in July 2018. Ear­lier this month, euro­zone fi­nance min­is­ters ap­proved the lat­est 8.5 bil­lion-euro ($9.9-bil­lion) dis­burse­ment of the bailout, just in time for Athens to meet ma­jor debt re­pay­ments. This gives Athens the chance to test with­out ma­jor risks its cred­i­bil­ity in the mar­kets. The Greek econ­omy nearly col­lapsed in 2010 un­der a moun­tain of debt and it had to be bailed out by its euro­zone part­ners three times to pre­vent it bring­ing down the sin­gle cur­rency bloc. The EU’s econ­omy com­mis­sioner, Pierre Moscovici, said ahead of visit to Athens for talks with Prime Min­is­ter Alexis Tsipras on debt re­lief that Greece is be­gin­ning to see the pos­i­tive re­sults from the the tough aus­ter­ity mea­sures it has un­der­taken. “Greece was caught up in an in­cred­i­ble eco­nomic and fi­nan­cial storm,” Moscovici told France In­ter ra­dio yes­ter­day.

THESSALONIKI: A woman makes a straw chair in Thessaloniki yes­ter­day. Greece will make its first re­turn to the debt mar­kets in three years to­day, test­ing the waters to see if it can be­gin to wean it­self off bailout loans af­ter tough re­forms.

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