Greece plans to sell its so-called Diaspora bonds worth up to $ 3bn to U.S. retail investors in the first half of the year, after it filed a shelf-registation with U.S. regulators to proceed with the issue, according to Dow Jones Newswires.
A senior Greek Finance Ministry official said that the bonds will be sold in a series of tranches every six months to a year.
“This is a first-half item. What we have done with the shelf-registration is to establish our intent to proceed with the program,” the official said, according to the newswires. “We won’t issue the full amount all at once, but rather in bits and pieces.”
Amid ongoing investor worries that Greece may default or be forced to restructure its debt, the Diaspora bond offering seeks to overcome technicalities and tap into the ideal buyer΄s sense of national pride.
Such bonds are issued in the hope of accessing a unique channel into the U.S. market to reach Greek citizens living abroad and Americans of Greek descent, says Dow Jones.
Research by a World Bank economist showed that Diaspora bonds often fetch a “patriotic” discount in borrowing costs.
“Besides patriotism or the desire to do good in the investor΄s country of origin, such a discount can also be explained by the fact that Diaspora investors may be more willing and able to take on sovereign risks of default in hard currency, as well as devaluation as they may have local currency liabilities and they may be able to influence the borrower΄s decision to service such debt,” the report noted.
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!
