Bond 11 times oversubscribed

Greece’s new 30-year bond created the second largest bid book since 2010 on Wednesday, as demand exceeded 33 billion euros, covering the €3 billion raised 11 times, with the yield at 4.241% and the coupon at 4.125%.

With a rather courageous move, due to the increased volatility as well as the more “demanding” new investors brought by the investment grade, the Greek state has already completed 82% of the annual borrowing program from as early as April.

This market foray, the second major one since investment grade was restored to Greece, is an extremely positive credit development for the country in view of the assessments by rating agencies to come. The record for the largest offer book is held by a small margin by the 10-year bond issued in January, as it exceeded €35 billion.

The success of the Public Debt Management Agency (PDMA) is reinforced by the fact that such a long-duration bond is not necessary to have much appeal to investors, however positive the outlook for the Greek economy may be at the moment.

Although there was no unanimity from primary dealers for such an issue at this time, the PDMA decided to go ahead with it; the reason was that the important window of opportunity created by the upgrade of Greece’s outlook to “Positive” by S&P should not be missed. In fact, it was perhaps the only opportunity for Greece to issue a 30-year bond, in relation to the rest of 2024 and also 2025.

The demand and pricing of the issue fully justify this initiative by the PDMA. The strong interest from a total of 325 investors led to a reduction of 10 basis points in the final interest rate of the issue compared to the initial one, while regarding the distribution of the title, 69% of the issue was given to real money investors, 22% to banks and 9% to hedge funds.

National Economy and Finance Minister Kostis Hatzidakis commented that “the interest rate was set at a level that certifies the investment grade and compares directly to that of fellow eurozone countries.”