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Success! Greece raises € 3bln, 5-year bond coupon at 4.37%, yield at 4.62%

The response to Greece’s attempt to tap the markets on Tuesday confirmed that the country’s economy was on course for recovery and a final exit from bailout programmes, Greek government sources said on Tuesday.

“Greece’s return to the markets was crowned with absolute success and confirms the good course of the Greek economy, which is proceeding with steady steps toward a final exit from the crisis and memorandums,” the sources told the athensnewsagency.

“Specifically, the coupon for the five-year bond was at 4.375 pct while the interest rate was at 4.625 pct, at prices clearly lower than the country’s last foray into the money markets in April 2014, where they were 4.75 pct and 4.95 pct, respectively,” the sources noted.

They also highlighted that the majority of the 200 official offers reaching a total 6.5 billion euros were “real investors of global reach and not vulture funds”. This amounted to a vote of confidence from the international investment community in the Greek economy, the sources said.

“The Greek state raised the sum of 3.0 billion euros, meeting the target of the Greek bond and laying firm foundations for the country’s lasting and sustainable access to money markets,” they added.

Finance Minister Euclid Tsakalotos

“In English terms, the exit to the markets was satisfactory, in Greek terms it was a bit more than we expected.

There will be second and third exit.”

Greece sold debt to private investors for the first time in three years on Tuesday, a significant step toward gaining financial independence and exiting its third international bailout next year.

The deal comes a month after euro zone finance ministers signed off on a new loan and sketched out measures to chip away at Greece’s debt mountain after the current bailout finishes in August 2018.

Athens says Tuesday’s sale of a new five-year bond is a test run to ensure Greece can rely on market funding next year. A tender of old bonds run alongside the sale will help lower its repayments in the years following its bailout exit.

The deal did not attract as much demand as the country’s brief foray into markets in 2014, but Athens looked to have paid less to borrow the same amount, 3 billion euros, Reuters notes.

“The return of Greece to the capital markets was and is the goal of the ongoing adjustment program. We therefore welcome the fact that Greece has the chance to return to the market on a step-by-step basis,” a spokeswoman for the finance ministry in Germany, Europe’s biggest economy, said.

Analysts said some investors may be put off Greek government bonds because they have the lowest credit rating in the euro zone and are not being eligible for purchase by the European Central Bank under its quantitative easing scheme.

The Greek state was targeting to raise 4.03 billion euros, media had written on Monday.

I had heard provision for banks was 1.5million euros.

And where will this money go??? To Greeks or to lenders?

PS the state does not pay taxes for raising 3billion euros, does it? 😛

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  1. I doubt that total fees and commissions for banks managing the issue were only 1,5 MEUR. That would be something like 1/20th of a percent of the total issue of 3 BEUR. I would expect total fees and commissions in the area of 0,5%-1%, or 15-30 MEUR. After all, there were 6 or 7 lead banks involved, each claiming its share of total fees and commissions.

  2. Now you know why this patriotic government issued the bond. They had some buddies in the banks who felt a little bit under the weather and wanted to cheer them up with some “commission” cash, paid by the usual idiots, us of course.