Greece Raises $3 Billion by Reissuing 5-Year and 30-Year Bonds

Greek Finance Minister Christos Staikouras announced the successful reissue of Greece’s 5-year and 30-year bonds. These bonds allow investors to invest in the Greek government’s sovereign debt for the next 5 or 30 years, depending on which bond they purchase.

“This double tapping of the markets, from which the Greek State drew 2.5 billion euros in total, took place despite the fact that this year’s target of the borrowing program is covered,” read a statement from Staikouras.

“But this increased demand for Greek bonds, particularly by a large segment of institutional investors, provided the country the opportunity to improve the liquidity of the yield curve at two more points, drawing at the same time capital with particularly favorable terms.”

The Greek State received 2.5 billion euros ($3 billion dollars) for both bonds, 1 billion for the 30-year bond at a 1.67% interest rate, and 1.5 billion euros for the 5-year bond– at an interest rate close to zero.

Greece’s bond market is experiencing an astounding renaissance amongst investors, and is described as having “the lowest risk and highest returns wherever major government bonds are traded,” and for being a harbinger of the nations comeback from the financial crisis: “economists expect the second-fastest growth among 34 developed countries. It’s also an emblem of unanticipated economic rejuvenation and the power of 19 nations sharing a currency, the euro,” wrote Matthew Winkler in an opinion piece for Bloomberg.

Bonds in Greece’s sovereign debt have become one of the most popular investments in Europe

Analysts attribute Greece’s rise in the bond market to former Prime Minister Alex Tsipras staying with the euro instead of backing into a national currency like the drachmas in the wake of Greece’s financial crisis. Since Greece held strong with the euro, the fluctuation of the price of the nation’s debt has reduced dramatically: from 69% in 2015 to 3.8% in May of this year– the lowest its been in a decade.

Greek securities rival that of the U.S. Treasury, and are currently leading the world in return on investment, providing a total return of 120% in the last 5 years. European, U.S., and Asia-Pacific securities brought in only 19%, 13%, and 8% in the same period.

Greece bounced back by holding strong to the euro and flipping its debt into one of Europe’s best longterm investments, and now seeks to increase its GDP by 5.1% in 2022, the exact figure that ranks it as the second fastest growing country in the developing world.

S&P Ratings increased Greece’s sovereign credit rating from BB to BB- in response to its impressive and sustainable growth. “The upgrade reflects our expectation of a rapid improvement in Greece’s economic and budgetary performance as the adverse impacts of the Covid-19 pandemic subside,” the rating company explained in a statement.