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

Philippines, Muslim Rebels Try to Salvage Peace Pact

Peace process faces major setback after botched military operation to find terrorists results in bloody gunbattle between government forces, Moro Islamic Liberation Front fighters More

Republicans Expect Long, Expensive Presidential Battle

Political strategist says eventual winner will be one who can put together strongest coalition of various conservative groups that make up Republican Party More

Video New Wheelchair Is Easier to Use, Increases Mobility

Engineers have come up with a lever-operated design that makes use of easily accessible bicycle technology 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.
Liberia's Almost Last Ebola Patient Grateful but Still Grievingi
X
Benno Muchler
March 26, 2015 3:41 PM
Beatrice Yardolo was to make history as Liberia’s last Ebola patient. Liberians recently started counting down 42 days, the period that has to go by without a single new infection until the World Health Organization can declare a country Ebola-free. That countdown stopped on March 20 when there was another new case of Ebola, making Yardolo’s story a reminder that Ebola is far from over. Benno Muchler reports from Monrovia.
Video

Video Liberia's Almost Last Ebola Patient Grateful but Still Grieving

Beatrice Yardolo was to make history as Liberia’s last Ebola patient. Liberians recently started counting down 42 days, the period that has to go by without a single new infection until the World Health Organization can declare a country Ebola-free. That countdown stopped on March 20 when there was another new case of Ebola, making Yardolo’s story a reminder that Ebola is far from over. Benno Muchler reports from Monrovia.
Video

Video Cambodian Land Grabs Threaten Traditional Communities

Indigenous communities in Cambodia's Ratanakiri province say the government’s economic land concession policy is taking away their land and traditional way of life, making many fear that their identity will soon be lost. Local authorities, though, have denied this is the case. VOA's Say Mony went to investigate and filed this report, narrated by Colin Lovett.
Video

Video US, South Korea Conduct Joint Military Exercises

The Eighth U.S. Army Division and the Eighth Republic of Korea Mechanized Infantry Division put on a well orchestrated show of force for the media this week during their joint military training exercises in South Korea. VOA’s Seoul correspondent Brian Padden was there and reports the soldiers were well disciplined both in conducting a complex live fire exercise and in staying on message with the press.
Video

Video Space Program Status Disappoints 'Last Man on the Moon'

One of the films that drew big crowds last week at the annual South by Southwest festival in Austin, Texas, tells the story of the last human being to stand on the moon, U.S. astronaut Eugene Cernan. It has been 42 years since Cernan returned from the moon and he laments that no one else has gone there since. VOA’s Greg Flakus reports.
Video

Video Young Filmmakers Shine Spotlight on Giving Back

A group of student filmmakers from across the United States joined President Barack Obama at the White House this month for the second annual White House Student Film Festival. Fifteen short films were officially selected from more than 1,500 entries by students aged 6 through 18. The filmmakers and their families then joined the president and a group of celebrities for a screening of their films. VOA’s Julie Taboh reports.
Video

Video VOA Exclusive: Interview with Afghan President Ashraf Ghani

Afghan President Ashraf Ghani, during his first visit as president to Washington, gave a one-on-one interview with VOA Afghan Service reporter Said Suleiman Ashna, about his request for a change in U.S. troop levels, the threat from the Islamic State, and repairing relations with the United States and Pakistan. The interview was held at Blair House, late Sunday, in Pashto.
Video

Video California Science Center Tells Story of Dead Sea Scrolls

The ancient manuscripts were uncovered in the mid-20th century, and they are still yielding clues about life and religious beliefs in ancient Israel. As VOA's Mike O'Sullivan reports, an exhibit in Los Angeles shows how modern science is bringing the history of these ancient documents to life.
Video

Video Angelina Jolie Takes Another Bold Step

Hollywood actress and filmmaker Angelina Jolie has revealed she had her ovaries and fallopian tubes removed to lower her odds of getting cancer. Doctors say the huge publicity over her decision will help raise awareness about the importance of cancer screening. VOA’s George Putic has more

All About America

Circumventing Censorship

An Internet Primer for Healthy Web Habits

As surveillance and censoring technologies advance, so, too, do new tools for your computer or mobile device that help protect your privacy and break through Internet censorship.
More

World Currencies

EUR
USD
0.9211
JPY
USD
119.18
GBP
USD
0.6722
CAD
USD
1.2509
INR
USD
62.518

Rates may not be current.