Greek bond order book soars to €17.5bn
Greece has attracted a staggering €17.5bn order book for its eagerly anticipated return to the bond market – and banks are still taking bids.
The final size of the five year deal is yet to be confirmed but banks working on the deal have been able to tighten the indicated price to a yield of just 5 per cent, give or take 5 basis points – much lower than some analysts anticipated.
The order book includes €1.3bn of orders from the arranging banks, but is still a strong confirmation of the ravenous appetite for eurozone periphery debt. One person close to the deal said there had been more than 500 different investor accounts placing orders.
Athens announced its return to global capital markets on Wednesday. Following a painful period of austerity and the biggest debt restructuring in history, Greece achieved a primary surplus in 2013. But with high levels of unemployment it remains the weakest link in the eurozone.
As if to underline the fragility of Greece’s recovery, the country’s labour unions embarked on nationwide anti-austerity strike on Wednesday, forcing schools to close and bringing parts of the public transport network to a standstill. News of the debt sale was barely reported in Athens because of television blackouts.
Antonis Samaras, Greece’s prime minister, is keen to show that Greece is able to borrow money independently of the troika of international lenders – the European Central Bank, the European Commission and the International Monetary Fund, ahead of May’s European elections. The bond will be governed by UK law in an attempt to attract investors who fear they could be wiped out by another debt restructuring.
Greece is taking advantage of falling borrowing costs across Europe amid growing speculation that the European Central Bank will embark on a round of quantitative easing.
Greece’s benchmark borrowing costs on the 10-year bond hit more than 30 per cent after the country’s dramatic debt restructure in 2012, but have now fallen below 6 per cent.
Bank of America Merrill Lynch, Deutsche Bank, HSBC, Goldman Sachs, Morgan Stanley and JPMorgan are managing the issue.
Source: FT
