30-year bond after 16 years - Over €26 billion in bids

Impressive demand for the version of the 30-year bond with bids exceeding EUR 26 billion. After 16 years the Greek Public comes to the markets with 30-year bonds as the climate - after the decision of the European Central Bank last week to accelerate bond purchases from the secondary market - is particularly positive.

The Greek government's previous exit to the markets was at the end of January, when it issued a 10-year bond with bids eventually exceeding €29 billion, at which point the government raised €3.5 billion.

It is noted that in March the country has agreed to repay part of the loans it has received from the International Monetary Fund, namely €3.3 billion. The government's loan programme foresaw for this year to raise between EUR 8 and 12 billion from the market. This amount can be comfortably covered with the assistance of the European Central Bank, as after the extension of the PEPP pandemic programme, the Central Bank is estimated to be able to buy EUR 16 billion of bonds from the market in addition to the EUR 19 billion already in its portfolio.

Bloomberg: Greece completes the return to capital markets

With the adoption 30-year bond, which is the first of such a long duration since 2008, Greece completes its full return to the capital markets, according to a report by Bloomberg. The sale, he notes, is an indication of how far Greece has come in the past decade, as at the height of the debt crisis in 2012, 10-year bond yields had soared to 44% with the country being shut out of international markets.

Today, yields are lower than 1%, enabling the government to issue long-term bonds and complete its yield curve, reports Bloomberg. Greece, Bloomberg reports, is following other European countries in taking advantage of low borrowing costs to finance its economic recovery from the pandemic crisis.

«The sale of Greek bonds marks the restoration of the country's reputation,» said Alexandros Malamas, a broker at Piraeus Securities in Athens. The fund manager, Charles Diebel, said the bond issue means that Greece is now «back in the game». «It is completing its comeback,» said Jan von Gerich, chief analyst at Nordea Bank Abp. «It will be really interesting because of the long duration and a good test of the risk sentiment in the bond market,» he added.

For investors, Greek bonds have already borne fruit as last year alone they yielded around 18%, the best performance in the region, according to the Bloomberg Barclays. «Greece currently has a «safety cushion» of €30 billion, which means it has no immediate need to raise short-term funds. However, the government wants to boost its reserves as the economic impact of the pandemic is greater than expected,» Bloomberg reports.

Greek bonds are emerging from the «fire» of 2011 stronger than ever, according to the paper. Trading in Greek bonds remains limited, According to Bank of Greece data, the amount of trading in the Electronic Secondary Securities Market (HICP) totalled EUR 2.6 billion last month compared to a high of EUR 136 billion in September 2004. This means the upcoming issue also represents a rare opportunity for investors to buy Greek securities, especially as the European Central Bank is providing support with its bond buying, Bloomberg notes.