Greece’s Finance Ministry denied reports that it was planning to issue a 10-year government bond and its issue had been postponed due to Italy market jitters. Citing government officials, international news agency reuters said in an exclusive story that Greece has decided to push back by a few months its plan for a new bond issue due to increased political risk in Italy that has rocked euro zone debt markets.
According to amna news agency, finance ministry sources pointed out on Wednesday that no decision to issue such a bond had been made.
“In order for there to be a decision to postpone, there must first be a decision to issue. There has been no such decision,” the sources said.
“The Public Debt Management Agency (PDMA) has general instructions from the government since last summer to carry out – as it has already done – trial returns to the markets. Bond issues are decided by the PDMA, which has the necessary knowledge and expertise to select the right time, on the basis of technocratic criteria,” the sources added.
“Athens was keen on a new bond issue, most likely its first 10-year paper after a decade, this summer and preferably before its current bailout ends in August, to establish continuity in the bond markets,” reuters wrote.
But officials told Reuters that the plan might have to wait until the autumn, when Greece hopes to have also secured further debt relief from its official lenders.
“We examined the possibility of an issue before the end of the bailout but after the recent turbulence it is not going to happen,” one of the officials said, declining to be named.
The yield on 10-year Greek bonds GR10YT=RR has risen by about half a percentage point to 4.5 percent in the last two weeks. Likewise, the yield of 7-year government paper issued in February climbed around 58 basis points before easing to 4.24 percent on Wednesday.