ATHENS – Unable to make a full market return almost a year after the end of 326 billion euros ($366.55 billion) in three international bailouts, Greece’s new New Democracy government said it will issue a 7-year-year bond.
In a notice released July 15, Greece’s Public Debt Management Agency (PDMA) named banks in charge of managing the auction. PDMA announcements are typically made on the eve of the auction but no date was given.
Greece is expected to set a 2.5 billion-euro ($2.81 billion) target for its latest bond issue, completing market borrowing needs for 2019 and following successful 5-year and 10-year bond auctions earlier this year that were sold at interest rates far higher than the bailouts.
Low yields in Eurozone countries have helped Greece raise money on bond markets after the rescue packages and as the former ruling Radical Left SYRIZA had relied mostly on a 22-billion euro ($24.75 billion) buffer while testing the markets.
That was left over from a third rescue package of 86 billion euros ($96.68 billion) that former Prime Minister Alexis Tsipras sought and accepted in the summer of 2015 after saying he wouldn’t because it came with more harsh austerity measures he swore to reject but then implemented.
The Finance Ministry said the new bond would cover the annual goal for draining capital from markets for this summer.
The PDMA told the Athens Stock Exchange the banks involved would be Bank of America Merrill Lynch, scandal-stained Deutsche Bank that is laying off scores of thousands of workers,, Morgan Stanley, Japan’s Nomura and France’s Société Générale.
The yield on the 10-year Greek bond at the opening of trading on July 15 was 2.35 percent; 1.32 percent on the five-year bond, said the business newspaper Kathimerini.