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10-year bond: Greece raises €3.5bln with 4.4% interest rate

Greece on Tuesday successfully auctioned a new 10-year bond raising around 3.5 billion euros from the market with the interest rate of the issue set a 4.4%.

The Public Debt Management Authority said in an announcement that investor interest in the auction was very strong with offers reaching 22 billion euros, a development that helped push the interest rate of the bond to mid swap + 156 basis points, from mid swap + 175 bp initially.

Greece sold a 10-year bond in February 2, 2022 at an interest rate of 1.75%.

Tuesday’s auction covered almost 50% of the country’s borrowing program for the year.

The Authority said that Greece must raise around 15.4 billion euros from the market to cover its funding needs this year, of which around 7.2 billion euros to refinance maturing bonds and 4.5 billion to pay interest on public debt.

The finance ministry also plans to reduce the reserve of treasury bills circulating in the market by around 1.0 billion euros in 2023. According to the borrowing plan, 7 billion euros will be covered with new bond issues and the remaining 4.2 billion through other funding sources such as EIB, RRF, etc.

The ministry also plans to raise 2.0 billion euros from its privatization programme, while it examines the issue of its first green bond to support the implementation of its sustainability agenda. The government’s borrowing needs this year are lower due to an expected 1.7 billion euros primary surplus projected in the state budget.

Finance Minister Christos Staikouras welcomed the successful issuance of the new 10-year Greek bond on Tuesday. He said in a statement: “we are building strong cash reserves, following a prudent fiscal policy and implementing reforms, so that we bravely support households and businesses for as long as necessary and strengthen, even more, the sustainable development of the Greek economy.”

He added that the issuance “was successful, in terms of demand, capital quality and borrowing costs, taking into account the volatility in the international environment.”

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