News / Economy

Banking Sources: Greece Plans April Bond Market Comeback from Default

Greek Finance Minister Yannis Stournaras arrives to a press conference following the end of a European Finance ministers meeting in Athens, April 2, 2014.
Greek Finance Minister Yannis Stournaras arrives to a press conference following the end of a European Finance ministers meeting in Athens, April 2, 2014.
Reuters
Greece is planning to return to the international bond market this month, four years after it became the first eurozone country to be bailed out and only two years since defaulting on its debts.
 
With Greece showing signs of pulling out of a crippling recession, the government aims to raise two billion euros ($2.75 billion) in a sale of five-year bonds, banking sources told Thomson Reuters markets service IFR on Thursday.
 
A power company is also poised to become the first Greek state-controlled enterprise to sell bonds since Athens had to turn to the European Union and IMF for the rescue in 2010.
 
Greece has been frozen out of long-term international borrowing since 2010 and imposed losses on private bondholders as recently as 2012 in a 130 billion euro debt restructuring, meaning it will be staging one of the swiftest comebacks by a country from default.
 
Greek bond yields, which have fallen dramatically since the restructuring, hit fresh four-year lows on Thursday after the country lined up a group of banks to manage the sale.
 
Deutsche Bank, Bank of America Merrill Lynch, JP Morgan and Goldman Sachs have been given the mandate to organize the sale, two sources said, which aims to benefit from a feeling that Greece is finally emerging from a crisis which has wiped a quarter off its economic output in the past six years.
 
The exact timing is still to be determined and the final list of banks could change, they said.

“This is the most important deal Greece will do,” said one banker.
 
While Ireland has already left its EU/IMF bailout program and Portugal plans to follow in May, Greece's problems are far from over.
 
Unemployment is at 27.5 percent and government debt was an estimated 176.2 percent of annual economic output at the end of 2013, a level which is unaffordable in the long term.
 
Its debt burden has soared from an already sky-high 130 percent in 2009 as the government has borrowed heavily from the EU and International Monetary Fund under the 237 billion euro bailout which kept the country afloat.

"Greece is back”

 
Nevertheless, Prime Minister Antonis Samaras told Reuters on Wednesday that “Greece is back”, and investors last month gave a bond issue by Piraeus Bank, the first by a Greek lenders in four years, as warm welcome.
 
Greek electricity utility PPC, which is 51 percent state-owned, plans to sell at least 300 million euros of debt this month, two sources familiar with the matter told Reuters on Thursday.
 
Finance Minister Yannis Stournaras told Reuters on Wednesday that Greece's first post-crisis foray into bond markets would be on a “trial and error” basis but the nation expects to fund itself without help from the EU and IMF in 2016.
 
Stournaras pointed to more positive attitudes among eurozone finance ministers who meet in the Eurogroup.

“The mood has changed dramatically recently. Simply look at what happened at Eurogroup - everybody thinks that Greece now is out of the woods,” Stournaras said.
 
Greek yields have tumbled from more than 30 percent after the restructuring in 2012 as investors sought higher returns. Greek 30-year yields dropped below 6 percent for the first time in four years on Thursday. Ten-year yields fell eight basis points to 6.14 percent after the news.
 
The Eurogroup met in Athens this week after the EU and IMF finally agreed a program with Athens to allow bailout funds to keep flowing. Stournaras said Greece did not need additional financing beyond its current bailout for the next year, and hoped it would not need fresh aid for the year after that.
 
The government posted a budget surplus before interest payments last year, making it eligible for further debt relief from its partners. That may take the form of extending repayment terms on existing bailout loans and lowering interest rates, rather than injecting fresh funds

You May Like

Sydney Hostage-taker Failed to Manipulate Social Media

Gunman forced captives to use personal Facebook, YouTube accounts to issue his demands; online community helped flag messages, urged others not to share them More

UN Seeks $8.4 Billion to Help War-Hit Syrians

Effort aimed at helping Syrians displaced within their own country and those who've fled to neighboring ones More

Who Are the Pakistani Taliban?

It's an umbrella group of militant organizations whose objective is enforcement of Sharia in Pakistan 'whether through peace or war' More

This forum has been closed.
Comments
     
There are no comments in this forum. Be first and add one

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Will Pakistan School Shooting Galvanize Pakistan Against Extremism?i
X
Ayesha Tanzeem
December 17, 2014 11:54 AM
The attack on a military school in Pakistan’s northwest city of Peshawar left 141 dead, including 132 children. Strong statements of condemnation poured in from across the world. The country announced three days of mourning, and the leadership, both political and military, promised retribution. VOA's Ayesha Tanzeem looks at how likely the Pakistani government is to clamp down on all extremist groups.
Video

Video Will Pakistan School Shooting Galvanize Pakistan Against Extremism?

The attack on a military school in Pakistan’s northwest city of Peshawar left 141 dead, including 132 children. Strong statements of condemnation poured in from across the world. The country announced three days of mourning, and the leadership, both political and military, promised retribution. VOA's Ayesha Tanzeem looks at how likely the Pakistani government is to clamp down on all extremist groups.
Video

Video ‘Anti-Islamization’ Marches Increase Tensions In Germany

Anti-immigrant rallies in Germany have been building in recent weeks, peaking Monday night in the city of Dresden where tens of thousands of people turned out to demonstrate against what they call the ‘Islamization’ of the West. Germany has offered asylum to more Syrian refugees than any other country, and this appears to have set off the protests. Henry Ridgwell reports from London.
Video

Video Aceh Rebuilt Decade After Tsunami, But Scars Remain

On December 26, 2004 there was an earthquake in the Indian Ocean so powerful it caused the Earth’s axis to wobble a few centimeters. Onshore on the island of Sumatra, the resulting tsunami was devastating. A decade later, VOA Correspondent Steve Herman reports from Banda Aceh, Indonesia, where although there is little remaining evidence of the physical devastation, the psychological scars among survivors remain.
Video

Video Refugees Living in Kenya Long for Peace in the Home Countries

Kenya is host to numerous refugees seeking safe haven from conflict. Immigrants from Somalia face challenges in their new lives in Kenya. Ahead of International Migrants Day (December 18) Lenny Ruvaga has more for VOA News from the Kenyan capital.
Video

Video Turkey's Authoritarianism Dismays Western Allies

The Turkish government has been defiant in the face of criticism at home and abroad for its raids targeting opposition media. The European Union on Monday expressed dismay after President Recep Tayyip Erdogan lashed out at Brussels for criticizing his government's action. Turkey's bid to be considered for EU membership has been on hold while critics accuse the NATO ally of increasingly authoritarian rule. Zlatica Hoke reports.
Video

Video US-China Year in Review: Hong Kong to Climate Change

The United States is pushing for a code of conduct to resolve territorial disputes in the South China Sea as it works to improve commercial ties with Beijing. VOA State Department correspondent Scott Stearns reports on a year of U.S. policy toward China from Hong Kong to climate change.
Video

Video Japanese Leader’s Election Win Raises Potential for Conflict with Neighbors

Japan’s Prime Minister Shinzo Abe and his allies easily won a two-thirds majority in parliament Sunday, even though the country has slipped into recession under his conservative policies. VOA’s Brian Padden reports from Seoul, that the prime minister’s victory will empower him to continue economic reforms but also pursue a nationalist agenda that will likely increase tensions with Japan’s neighbors.
Video

Video Nuba Mountain Families Hide in Caves to Escape Aerial Bombings

Despite ongoing peace talks between Sudan's government and the rebel Sudan People’s Liberation Movement-North, or SPLM-N, daily aerial attacks continue in South Kordofan province’s Nuba Mountains. Adam Bailes was there and reports for VOA that government forces are targeting civilian areas, rather than military positions, with their daily bombardments.

All About America

AppleAndroid

World Currencies

EUR
USD
0.8033
JPY
USD
117.19
GBP
USD
0.6372
CAD
USD
1.1634
INR
USD
63.622

Rates may not be current.