Greece Raises €3.5 Billion from 15-year Bond Issue

Greece on Tuesday successfully completed a 15-year syndicated bond issue, raising 3.5 billion euros ($3.86 billion) at an interest rate of 4.45%.

Bids submitted exceeded 13.4 billion euros, of which 11.6 billion in cash and 1.8% in bond swap.

The Greek state returned to capital markets for the first time after the June 25 elections, taking advantage of a positive climate prevailing in the domestic bond market.

The issue was part of a program aimed to reduce the country’s public debt through a premature repayment of 5.5 billion euros of loans signed during the first memorandum.

BNP Paribas, BofA Securities, Deutsche Bank, Goldman Sachs, JP Morgan and National Bank act as lead managers of the issue.

National Economy and Finance Minister Kostis Hatzidakis welcomed the successful completion of the syndicated bond, saying it “attests to the forthcoming investment grade for Greece.”

In a statement, he said, that the issue “was completed successfully and with significant oversubscription, despite the continuing high uncertainty in the global economic environment, with good-quality capital.

Bond issue success “attests to the forthcoming investment grade for Greece”

“The results of the issuance attest to the forthcoming investment grade for Greece, which will lead to further reduction of the economy’s borrowing rate.

“Such developments, combined with the decision, among others, to repay the bilateral loans of the first memorandum ahead of time, serve the government’s target for a continuously dropping trend of the public debt to under 140% of the GDP by 2027, to which we are committed.”

Kostas Boukas, asset manager at Beta Securities in Athens, told Reuters that the government had extended the maturity of its debt, reduced its financing needs and mitigated risks stemming from higher interest rates via the sale.

Greece had already covered this year’s borrowing needs. It will now see its gross financing requirement drop to 5.5 billion euros annually in 2024 and 2025, down from about 9 billion euros before the sale, a finance ministry official told Reuters.

Mitsotakis won the support needed in June’s election to push ahead with his economic plan in a nation still dealing with the impacts of a huge debt crisis and three international bailouts.

He has pledged to deliver robust growth, an investment-grade credit rating and to repay about 5.5 billion euros of bilateral bailout loans ahead of schedule.

The pledge for repayment ahead of time is a commitment to investors, he underlined during an interview with Bloomberg. The Greek premier added that he intends to render the country a very attractive destination for foreign investments.