New vote of confidence in Greek economy are set by the markets, as bids for today's new issue of five-year bond exceeded 20 billion euros.
The initial guidance for the five-year bond yield was 0.28%, but it improved to around 0.20%.
Today’s bond issuance is the third in a row by the Greek government since the beginning of the year. So far, the Ministry of Finance has raised 6 billion euros at low interest rates out of the 10 to 12 billion —the initial plan drawn up by the Public Debt Management Agency for the entire year. This was preceded on March 17 by the issuance of a 30-year bond maturing in January 2052 with a coupon rate of 2.75%, through which the government raised 2.5 billion euros. The auction drew strong investor interest, with bids exceeding 26.1 billion euros. With the new issuance of the 10-year bond on January 27, the government raised another 3.5 billion euros at an interest rate of 0.75%. Investors offered to lend the Greek government 29 billion euros through this issuance.
The Ministry of Finance is attempting to take advantage of the favorable conditions prevailing in the bond markets thanks to the support provided by the European Central Bank, in order to bolster its reserves in light of the increased fiscal obligations caused by the pandemic. It is estimated that the government's cash reserves (including the so-called "hard buffer") range from 30 to 35 billion euros.
In addition, the government’s borrowing from the markets is facilitated by the positive stance taken by the international rating agency Standard & Poor’s, which upgraded the Greek economy.
