Today, Greece is expected to make its new exit to the markets with the 30-year bond. This is the second “big” exit that takes place for 2024 and is the largest issue of the bond in terms of duration that takes place after the recovery of the country’s investment grade but mainly after the recent upgrade of the outlook of the Greek economy – in the positive category – from Standard & Poor’s.
The size of the new issue of the 30-year bond is estimated to range between 2 billion euros and 3 billion euros. It is noted that ODDIX instructed BNP Paribas, BofA, Deutsche Bank, Goldman Sachs, JP Morgan and Piraeus Bank to undertake the issuance of a bond maturing on June 15, 2054.
The 30-year bond
A decrease of 1.40% was recorded today at 9.30 am Greek time in the yield of the country’s 30-year bond. As they showed in the data of the investing.com website, the yield on the 30-year Greek bond rose to 3.86%, while the high of the day was 3.94%. It is noted that the current 30-year bond maturing on January 24, 2052 has a yield of 3.9% and a coupon of 1.875%. The initial issue was on March 24, 2021 and the Greek State raised 2.5 billion euros from the 25.8 billion euros that was the total amount of the offers. Then on September 8, 2021, there was a reissue for €1 billion with total offers at €9.6 billion.
See the relevant investing.com table below
The exit of ODDIX to the markets with a 30-year bond
Pricing of the new bond offering is expected to take place today, under market conditions. While the mid swaps for the 30-year bonds amount to 250 basis points/ 2.5%. At the same time, it is pointed out that the interest in the issuance of the bond in question is expected to be particularly “lively”.
It is noteworthy that Greece is expected to have a benefit of up to 40 million euros in terms of interest on the Greek debt after its decision to repay early loans of up to 5 billion euros within the year from the rescue program (Greek Loan Facility – GLFs).
It is recalled that in the spring of 2022, the country returned 2.645 billion euros to its partners and at the same time Greece’s obligations to the IMF were zeroed out (1.86 billion euros were paid, which would normally be paid at the beginning of 2024). The loans of the first memorandum with a repayment period from 2020 to 2040 and with an interest rate of 3 months Euribor + 0.5% from the Eurozone amounted to 52.9 billion euros. These loans are quite high as the 3-month Euribor is at 3.94%.
In fact, the servicing of EFSF (European Financial Stability Fund) loans amounting to 141.8 billion. euro started this year and the repayment will take place in 2056 while from 2034 an additional 86 billion euro will be added from the ESM until 2060.
However, in 2024 it is expected that there will be a further reduction in general government debt to 152.3% of GDP from 160.3% of GDP in 2023 (355 billion euros in absolute numbers)
