Greece to return to bond market

Country was epicentre of the European sovereign crisis that began in 2009

Greece will return to the bond market after a three-year hiatus, banking on investor interest in its recovery story.

The country, which was the epicentre of the European sovereign crisis that began in 2009, is looking to sell five-year bonds, according to an Athens Stock Exchange filing. It is also inviting holders of 4.75 per cent bonds due in 2019 to tender the notes for cash, according to the statement. The bonds are expected to be priced today.

With the sale, the government of Prime Minister Alexis Tsipras is seeking to chalk out a path for an exit from the current bailout programme, which ends in August 2018, while also capping the country’s financing needs in 2019, expected to be about €19 billion ($22.1 billion).

A return to the bond market last week was held off partly due to a €325 billion ceiling set by the International Monetary Fund on the amount of debt the country can hold. Workarounds like debt swaps — that could improve Greece’s maturity profile without increasing the overall load — can ease the government’s forays into the market.

‘Perfect’ timing

It’s “perfect timing,” said Lutz Roehmeyer, who helps oversee €12 billion at Landesbank Berlin Investment. “It is after getting bailout money, after getting the go ahead for a debt reduction next year, after IMF said it is likely to join the bailout finally, after S&P rating action and still before ECB ends QE.”