Greece is proceeding on Wednesday with its second market foray for 2023, barring any unforeseen circumstances, with the issuance of a new five-year bond. Its aim is to capitalize on the positive climate that exists in the bond market but also to avoid any possible instability that may stem from the pre-election period.
It is therefore not a coincidence that the announcement of the foray was made a few hours after that of the national elections for May 21. The already official election date removes a significant amount of uncertainty for investors who now have a specific horizon for the pre-election period.
That also explains the fact that Greek bonds did not come under any pressure on Tuesday – unlike the Athens Stock Exchange, where the activity by a few players who chose to liquidate and take a wait-and-see attitude in the next, pre-election period, was capable of driving the market lower.
However, since the entire election process will be time-consuming, it may cause a degree of volatility in the market. Therefore, with this move, the Public Debt Management Agency (PDMA) prefers to cover early on most of the total publishing activity of the year and not proceed with another publication in the middle of the pre-election period.
There is currently no need for liquidity. However, it is important for Greece to have a regular presence in the markets. As a second round of elections will likely have to take place in July, the next opportunity to tap the bond markets would be in September, meaning that the PDMA would have had eight months of “absence,” which does not exactly send out a sense of normality.
The aim of issuing the new 5-year bond – the process of which is being run by BNP Paribas, Citi, Deutsche Bank, Morgan Stanley, Nomura and Piraeus Bank, according to a bourse filing on Tuesday – is to raise some 2.5-3 billion euros.
Market experts estimate that demand for the Greek issue will be very strong, with a significant oversupply in the bookbuilding process.
Source: ekathimerini