Greece sees strong demand for 30-year bonds, to ease cost of debt

ATHENS, Greece (AP) – Greece on Wednesday raised 2.5 billion euros ($ 3 billion) in a 30-year government bond sale that has seen strong demand and aims to improve the country’s debt profile during the pandemic.

The yield was just under 2% and the auction was more than 10 times oversubscribed, the country’s Public Debt Management Agency said.

A severe recession in 2020 and high costs of pandemic relief have pushed Greece’s debt-to-gross domestic product ratio to more than 200%, according to estimates, last year.

The government hopes to take advantage of the current low interest rates to improve the sustainability of Greece’s debt and offset some of the impact of the pandemic on public finances. This was Greece’s first 30-year bond issue since 2007.

Finance Minister Christos Staikouras said Wednesday’s bond auction, the second so far in 2021, marked the end of the country’s dependence on funds from successive international bailouts between 2010 and 2018.

“This question marks a complete return of our country to international markets,” he said. “It offers security to investors because it far exceeds the debt settlement period agreed with the (rescue) institutions.”

At the end of January, Greece raised 3.5 billion euros (4.2 billion dollars) with a 10-year bond issue whose yield was close to 0.8%.

Athens also plans to repay part of its bailout debt to the International Monetary Fund ahead of schedule to reduce annual debt servicing costs.

The prepayment worth some 3.3 billion euros ($ 3.9 billion) would cover nearly two-thirds of the outstanding debt to the IMF, and would follow a similar repayment worth 2.7 billion euros ($ 3.2 billion) at the end of 2019.

Greece slipped into recession last year due to the pandemic and lockdown measures, with the economy shrinking by around 8.2%, while hopes of a strong recovery this year have been dampened by extended restrictions. ___

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