Greece’s first cautious return to bond markets has come with a 3 billion euro ($4.15 billion) five-year instrument that has brought a yield of 4.75 percent, far below what had been paid during the height of a crushing economic crisis.
It was the first time since seeking international bailouts in 2010 that Greece was able to get interest from private investors and two years after they were stiffed with 74 percent losses by a previous government in a desperate, failed bid to write down the country’s debt, which stands at staggering 310.35 billion euros, about $430 billion.
The new transaction attracted more than 20 billion euros of interest from more than 550 investors, including 1.3 billion euros of lead manager interest, the news agency Reuters reported.
The level is a bonanza for investors who will cash in big time although the rates are far lower than Greece had paid when it was deemed toxic.
“Yields everywhere have been falling, and so, like in many asset classes, investors will be getting paid something for the risk that they are taking, but that risk premium is probably below historical levels for a commensurate risk,” Colm D’Rosario, Senior Portfolio Manager, Emerging Markets and High Yield, at Pioneer Investments told Reuters.
The government sought to take advantage of an improving economic atmosphere in the wake of a primary surplus and a deal over reforms with the Troika of the European Union-International Monetary Fund-European Central Bank (EU-IMF-ECB) triggering release of a long-delayed 8.3 billion euro installment.
Greece has been surviving since 2010 on two Troika bailouts of 240 billion euros ($330.7 billion,) most of which will run out this year, leaving the government dependent again on private investors willing to take a risk they won’t get burned again.
Despite the development, Greece is still planning to seek a restructuring or debt relief on what it owes the Troika, which could leave taxpayers in the other 17 Eurozone countries to pick up the bill for generations of wild overspending by Greek governments.
See all the latest news from Greece and the world at Greekreporter.com. Contact our newsroom to report an update or send your story, photos and videos. Follow GR on Google News and subscribe here to our daily email!
