Greece Launches 15-Year State Bond, Signaling Return to Financial Normality



Greece’s Public Debt Management Authority announced the launch of a 15-year state bond in a statement released on Monday.

The announcement came just 48 hours after the credit rating agency Fitch upgraded the country’s credit rating to BB from BB-.

This marks the first time that Greece has attempted to tap international capital markets with a bond maturing after 2032, the year in which the long-term measures managing Greek debt come to an end.

The Greek state hired Barclays, BNP Paribas, BofA Securities, Goldman Sachs International Bank, HSBC and J.P. Morgan for the bond issue.

Meanwhile, Greek state bond prices saw new record-breaking levels, with the 10-year bond yield falling to new historic lows in the domestic electronic secondary bond market on Monday.

The 10-year yield fell to 1.137% from 1.31 percent on Friday, with the five-year bond yield falling to 0.32 percent from the previous level of 0.43 percent.

Traders attributed this development to a decision by Fitch on Friday to upgrade the country’s credit rating by one notch to BB from BB- and the country’s credit rating outlook from “Stable” to “Positive.” This significant action facilitated the country’s new return to international capital markets with the 15-year bond issue.

Fitch analysts take it for granted that the Greek government will renegotiate a fiscal target from 2021 onward as part of an agreed-upon process with European institutions, which will be based on the country’s fiscal and growth performance and the implementation of reforms.

A reduction of targets by just one percentage point of GDP could give a significant boost to the economy. The Fitch experts also envisage that general governmental debt will fall to 161 percent of the GDP by 2021, from 181.2 percent of GDP in 2018.

With information from AMNA