Greece in new market test with bond swap

ATHENS: Greece offered to exchange some 30 billion euros ( US$ 35 billion) in bonds in a new market test for the country seeking to emerge from its latest bailout.

Floated on the Athens stock exchange, the swap involves a batch of 20 maturities originally issued in 2012, when Greece had brokered a major debt writedown.

Investors holding these bonds can now exchange them with new paper expiring in 2023 to 2042.

The Greek finance ministry said the purpose of the swap was to “align the terms of (Greece’s) outstanding debt with market standards for sovereign issuers in order to normalise (Greece’s) yield curve.”

Athens also wants to “provide the market with a limited series of benchmark securities which are expected to have significantly greater liquidity than the existing series of designated securities,” a statement on the swap said.

Bondholders have until November 28 to accept or reject the swap.

Greece plans to create a “cash buffer” to ease its way out of its third bailout in August.

This will be done “through the ESM ( European rescue fund) and possibly through new bond issues,” Greece’s draft budget said last month.

In July, Greece made a symbolic return to debt markets after a three-year hiatus, selling three billion euros worth of five-year bonds at 4.625 per cent, lower than its previous outing in 2014. — AFP