LAST UPDATE 12:00
“Exciting” is the demand for the new 30-year bond, as the offers exceeded 28 billion euros in just the first two hours. Then and shortly before the closing of the book of quotations, the demand was formed above 32 billion euros, while the interest rate was set at 165 basis points above the mid swap, i.e. close to 4.2%.
This is the second bond of such duration to be issued since 2021, and is Greece’s second “big” exit to the markets this year following the 10-year bond issued in January, followed by several auction reissues of existing bonds which will continue throughout 2024.
The initial interest rate was set at the mid swap (which was at 255 bps when the guidance was given) +175 bps. i.e. to approximately 4.3%, and then it fell to the mid swap +170 bp, i.e. close to 4.25%, while it closed at the mid swap +165 bp and approximately 4.2%.
BNP Paribas, BofA Securities, Deutsche Bank, Goldman Sachs Bank Europe, JP Morgan and Piraeus Bank have undertaken to “run” the entire process of the syndicated issue.
The bond has a maturity date of June 15, 2054, while the aim is to raise 2-3 billion euros – depending on how the offers move – and the interest rate is expected to be above 4%.
The surprise upgrade of Greece’s outlook to positive was what prompted ODDIX to… press the exit button. At the same time, other positive developments such as the outperformance of the primary surplus of 2023 in relation to the budget estimate, the very low financing needs of the country as well as the high cash reserves of 35.2 billion euros.
It is noted that before today’s issue, 52% of the 2024 issuance activity had already been covered, i.e. approximately 5.2 billion euros had been raised out of the total 10 billion euros that is the target for this year, with 4 billion euros concerning the new 10 years of January.
A 30-year bond will help build the Greek yield curve and give it depth, which is “required” after the recovery of investment grade.
The uncertainty expected ahead of this summer’s European elections as well as the US presidential election in November, combined with the “unknown X” that is how geopolitics will develop in the Middle East, were what prompted the ODDIX to come out now and not later in the markets.
Eleftheria Kourtalis
