A Greek national flag flies above the national parliament building in Athens. The Greek government had been shut out of bond markets since March 2010 and kept afloat with bailouts totaling 240 billion euros from the euro area and the IMF
Greece is ending a four-year exile from international markets with a bond sale of 3 billion euros ($4.2 billion), more than the government estimated, according to a person familiar with the matter.
The order book for the issue, which carries a coupon of 4.75 percent, exceeded 20 billion euros, said the person, who asked not to be identified because he isn’t authorized to speak about it. A Greek government official told reporters in Athens yesterday that Greece sought to raise 2.5 billion euros in the five-year bond issue.
“Greece returns to the bond markets under the same or even better terms than Ireland and Portugal,” Greek Deputy Prime Minister Evangelos Venizelos told reporters in Athens today after meeting with Prime Minister Antonis Samaras.
Greece, which has been bailed out twice, carried out the world’s biggest sovereign-debt restructuring and teetered on the brink of exiting the euro, had been shut out of bond markets since March 2010 and kept afloat with aid totaling 240 billion euros from the euro area and theInternational Monetary Fund.
Those funds necessitated the regular presence in Athens of officials from the so-called troika of the European Commission, the European Central Bank and the IMF, which became associated with austerity measures that triggered a political and social backlash.
‘Important Milestone’
“We welcome this,” Poul Thomsen, the IMF’s mission chief to Greece, said yesterday. “It’s a fundamental objective of the program to bring Greece back to market and this is an important milestone in this regard, and that clearly speaks to the success of the program.”
The yield on Greek 10-year bonds climbed three basis points, or 0.03 percentage point, to 5.92 percent at 11:10 a.m. London time. The rate fell 27 basis points yesterday, and touched 5.80 percent, the least since February 2010.
Greek securities returned 33 percent in the year through yesterday, the most among sovereign-debt markets tracked by the Bloomberg World Bond Indexes.
A car bomb exploded outside one of the Bank of Greece’s offices in central Athens this morning as a reminder of the upheaval that continues to rock the country almost four years after it resorted to calling for outside aid. Police said no one was injured in the bombing.
Some Damage
Protests, strikes and even bombings have been regular occurrences in Greece since then. Today’s device exploded at about 6 a.m. outside a building belonging to the Bank of Greece, causing some damage to surrounding buildings, a police spokeswoman said by phone.
Greece won approval this month from euro-area members for an 8.3 billion-euro aid payment, the first disbursement from its bailout program since December. The government and European Union predict that the Greek economy will expand 0.6 percent in 2014 after six consecutive years of contraction that has cost about a quarter of the nation’s economic output and sent theunemployment rate surging.
“The real economy is showing encouraging signs of recovery,” Greek Finance Minister Yannis Stournaras said at a conference in Athens today.
Greece’s unemployment rate dropped to 26.7% in January from 27.2% in the previous month, according to data today from the Athens-based Hellenic Statistical Authority.
The country still faces challenges including deflation. Consumer prices calculated using a harmonized EU method dropped 1.5 percent in March from a year earlier, the 13th straight decline. Non-performing loans ballooned to 31.7 percent of total lending at the end of 2013, according to data provided by the Bank of Greece.
To contact the reporters on this story: Marcus Bensasson in Athens atmbensasson@bloomberg.net; Hannah Benjamin in London at hbenjamin1@bloomberg.net
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