Greece’s first exit of the year to the public debt markets went beyond all expectations, with investors queuing up to participate in the bid book for the 10-year government bond, due in June 2034. The total offers exceeded 35 billion euros, forcing the Public Debt Management Organization (ODDIX) to raise the amount of 4 billion euros, which corresponds to 40% of this year’s programming (a total of 10 billion euros).
The coverage ratio reached almost an impressive 10x (8.75x), with the interest rate close to 3.45% (80 basis points from the mid swap), i.e. at lower levels than the original estimate of 3.5% (85 basis points from mid swap). The entire process was “run” by the banks Alpha Bank, Barclays, Citi, Commerzbank, Nomura and Société Générale.
This is the first exit to the markets with the “stamp” of investment grade (previously only reissues of already existing bonds), which Greece now enjoys from four different rating agencies.
Fitch, Standard & Poor’s, Scope and DBRS have since the second half of 2023 restored the country to investment grade status, while Moody’s is expected to do the same in the next scheduled assessment on 15 March 2024.
It is no coincidence that the yield spread between the Greek 10-year bond (3.19%) and the German 10-year bond (2.25%) is below 100 basis points for the first time since 2021.
At the same time, the “distance” of the Greek yield (3.19%) compared to the Spanish yield (3.14%) is almost negligible (<10 basis points), which means that Athens and Madrid are borrowing at almost the same interest rate.