wnol.info August 23 2017

Moscovici: Greece's market return and "dramatic improvement"

August 23 2017, 11:15 | Perry Erickson

Greece has mandated BNP Paribas Citigroup Global Markets Deutsche Bank Goldman Sachs HSBC and Merrill Lynch

Greece Facing Uncertain Future After Rejecting EU Proposals

The yield on the government bond maturing in 2019 fell on Monday to its lowest level since it was issued three years ago, as Athens prepared its market foray.

It even managed to borrow at cheaper rates than in 2014, the last time it tapped the worldwide bond market, HSBC, lead manager for the operation, told AFP.

"This choice is a significant step, part of Greece's strategy to regain viable and steady access to global markets", Tsipras's office said in a statement.

The auction of five-year government bond is being overseen by a consortium of leading bankers from BNP Paribas, Citigroup, Deutsche Bank, Goldman Sachs, HSBC and Merrill Lynch.

Existing Greek five-year bonds were trading at 3.6% on Monday morning compared with 63% at the height of the Greek financial crisis in 2012 when the finance ministry was unable to pay public sector wages and there were riots in the streets.

Demand reached 6.5 billion euros for the new bonds as well as the parallel switch offer from an older issue, according to government sources. As for Greece's debt relief, he added that "Greece's official creditors must respect debt relief measures agreed in latest Eurogroup meeting", said the Commissioner, to add that the International Monetary Fund remains "an important partner in bailout program".

He will meet Greek Prime Minister Alexis Tsipras, Finance Minister Euclid Tsakalotos and Bank of Greece Governor Yannis Stournaras, among others.

Greece now has no real need to draw money from the bond markets as it recently received renewed financial support at lower rates under its global bailout that should see it through until next year.

Greece still has a €326bn debt pile, after receiving three bailouts in the last seven years.

In a sign that the country is turning a corner the economy is projected to grow by 2.1% this year - after no growth at all in 2016.

Debt relief has been the major bone of contention between the government of Tsipras and the eurozone, which had delayed the deal to disburse the latest bailout funds.

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