Greece are looking raise about €4-5bn on a return to the markets by the end of the year and want to issue 3-5 year bonds by June, say euro zone officials reported by WSJ.
They are looking to piggyback the wave of lower borrowing costs that have seen yields tumble in the other PIIGS countries. Ireland had a very successful return to the market with it’s first bond sale in January where they received interest topping €14bn for €3.75bn available on offer in 10 year bonds. Portugal is also looking at receiving strong interest when they exit the bailout and return to the market in full.
I wonder if the same level of interest will be shown in Greece considering it’s been the really bad child in the bailout club?
The problem with most of these countries is that they think that investors are piling into them because they want to invest in the country itself. Italy’s PM Matteo Renzi said something along those lines earlier today. Let’s be honest here, there is still nothing fundamentally good to invest into in these countries and the leaders are kidding themselves if they think that’s the reason. They are seeing the money flow in purely because the ECB have built the dam against another possible scenario of Europe collapsing. That, and interest rates ranging from 3-4% in a low inflation environment is the reasons investors are piling in. Sure, the governments are getting the benefit of it but they are fools to themselves to think it’s anything else other than a yield chase. We’ll see how they feel if we see Europe hit the skids again and the money turning tail.
Just as I type Greece’s Stournara says he sees a small issue of bonds in the first semester of 2014
