Greece to issue more bonds after debt sale

Athens: Greece will issue more bonds after last week's successful five-year debt sale that ended a four-year drought, the head of the debt agency said Sunday.

"The bond sale was just the first step," Stelios Papadopoulos, head of the public debt management agency (PDMA) told the Kathimerini daily newspaper.

Greece on Thursday raised €3 billion ($4.2 billion, (Dh15.3 billion) at under 5 per cent interest, a move welcomed by its creditors in the European Union (EU) and International Monetary Fund (IMF).

A day later, visiting German Chancellor Angela Merkel said Greece's return to the international bond markets showed 'renewed confidence' in the crisis-hit country.

The PDMA chief on Sunday said Greece wanted to "pique the interest of foreign investors, so they can focus on the real reform carried out in the country".

The aim was also "to permit comparison with the five-year bonds of other states, as this is the most common mid-term maturity period for public debt," he said.

Athens also believes that the successful sale will lower the cost of treasury bills, which have been Greece's staple choice of debt issue for the past four years.

"It was done to lower the average borrowing cost of the Greek state by squeezing the excessive cost of treasury bills," Papadopoulos said.

Greece has lately sold three-month and six-month treasury bills at between 3 and 4 per cent interest.

The newspaper said that Greece could next issue three-year, seven-year of 10-year bonds, depending on market demand.

Athens found itself frozen out of debt markets in 2010 after it revealed its public accounts had been falsified, and was forced to seek a bailout from the EU and IMF to avoid defaulting.

Four years of fiscal reform under EU-IMF tutelage has brought upgrades to Greece's debt standing by ratings agencies in recent months, but Greek bonds still carry junk status.

Source: gulfnews.com

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