- POSTED: 10 Jul 2014 01:34
Heavily indebted Greece plans to issue an unspecified amount of three-year bonds, just three months after it returned to medium-term public debt markets, the finance ministry said.
ATHENS: Heavily indebted Greece plans to issue an unspecified amount of three-year bonds, just three months after it returned to medium-term public debt markets, the finance ministry said on Wednesday.
International banks have been mandated to manage the euro-denominated issue, and "the transaction will be launched and a price set in the near future, depending on market conditions," a statement said.
The semi-official Greek news agency ANA said the operation could seek to raise 2.5-3.0 billion euros (US$3.4-4.1 billion) at rates of around 3.0-3.5 per cent.
On Tuesday, Greece issued six-month treasury bills worth 1.625 billion euros at 2.05 per cent, lower than the level of 2.15 per cent it had offered during a similar operation in June.
In April, Greece raised 3.0 billion euros in a five-year bond issue at 4.95 per cent, the first time Athens managed to access medium-term debt markets since the country's financial crisis erupted in 2010.
Amid glimmers of returning investor confidence, Greece must deal with a massive level of public debt, equivalent to 175 per cent of gross domestic product (GDP).
In exchange for unprecedented levels of help from Eurozone partners, officials in Athens have already pledged to carry out a comprehensive programme of fiscal reforms.
The head of the European Financial Stability Facility, Klaus Regling, told an Athens press conference the bailout fund would look again at Greece's financial situation in a few months’ time, and pledged help as long as the country continued with the reforms.
"There is a commitment from (the) euro area to support Greece further as long as it implements the programme," Regling said. "They have not forgotten that.
"The assessment will be done in autumn," he added.
"There could be more money... what is ruled out is another haircut," Regling said in reference to a lowering of debt owed by Greece to its creditors.
In late 2011 and early 2012, nearly 106 billion euros of private debt owed by Greece was wiped out in exchange for stringent bailout conditions.
Athens now hopes to extend the payment period on debt it still owes, while also reducing the level of interest it must pay.