In the international markets, Greece is preparing to declare its presence once more, aiming to strengthen its cash reserves, which following early debt repayments have fallen to 35-36 billion euros. With the Greek economy having regained investment grade following 13 years, the Treasury’s attention is now turning to achieving a better rating even into 2024 which will lead to a greater increase in demand for investment in Greece, whether in bonds or direct foreign investments.
In this context, the Public Debt Management Organization (ODDIX) is ready to push the button for a new re-issuance which will keep investment interest alive and warm up the secondary bond market as well as government funds.
Although the duration of the Greek bond that will be reissued is still open, the most likely is to auction the 10-year bond that was issued in January 2023 through which the Greek government borrowed 3.5 billion euros at an interest rate of 4.25%. Regarding the amount of the reissue, this will not exceed 400-500 million euros with the settlement date being Wednesday, January 17.
The issuance of a new bond will take place next week and will be combined with the first of the 11 credit ratings that the Greek economy will have in 2024 from the five foreign houses that the European Central Bank takes into account. Greece’s first appointment with Scope Ratings is scheduled for January 26, so one or two days before or immediately following, the ODDICH is expected to instruct the banks that act as underwriters to spy on the investors’ intentions for the bond being issued.
As everything shows, the first move for 2024 will be with a 10-year bond that will aim to raise an amount close to 2.5 billion to 3 billion euros. Based on the history from previous issues and the increased appetite of investors for Greek bonds and with yields close to 3.3%, covering this amount will be an easy task for the Greek government. However, where the emphasis will be placed is on the composition of the investors to be extremely “quality”.
With these two moves at the Ministry of National Economy, they will have already covered 35% of this year’s loan needs, which even with the most aggressive scenario do not exceed 10 billion euros. The financing strategy for 2024 also includes reducing dependence on interest-bearing bonds by 2 billion euros to 12 billion euros in total and new early repayments of installments from the loans received by the country since the first memorandum. According to ODDIX, net financing needs this year amount to 5.4 billion euros and interest payments to 4.85 billion euros.
Source: newsbeast.gr
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