Greece returns to markets with 5-year bond

Are we? Aren’t we? Will Greece issue a long-term bond on Wednesday and return to the markets after four years spent in Troika’s deep freeze? Several Greek media claim  this morning  that a 5-year bond has already been launched  and that the borrowing interest would be 5.25% and total worth some 2 billion euro.

WSJ: Greece Plans to Issue Long-Term Bond on Wednesday

Greece is planning to issue its first long-term bond since its international bailout on Wednesday, two people familiar with the matter said to Wall Street Journal.

The country is likely to sell around €2 billion ($2.7 billion) in five-year debt, assuming market conditions remain benign, one of the people said.

Deutsche Bank AG and J.P. Morgan Chase & Co. have been hired to run the sale.

Earlier on Tuesday, the Greek Public Debt Management Agency auctioned €1.3 billion of 26-week T-bills at a uniform yield of 3.01%—more than half a percentage point lower than it paid at last month΄s sale.

Greece΄s 10-year bonds are trading with a yield a whisker over 6.1% on Tuesday, around the lowest level since 2010, Tradeweb data show. Bond yields fall as prices rise. (published Apr 8/2014 via Capital.gr)

Some media claim, we should anticipate the relevant announcement by Prime Minister Antonis Samaras and all herald that Greece wants to take advantage of the positive international atmosphere towards the debt-ridden country. According to latest information, PM Samaras will announce the glorious return later today and that the book of offers book will be opened tomorrow.

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“Return to the markets is for the common good of the Greek people,” a Nea Dimocratia MP said on private Skai TV just a couple of minutes ago, as if it’s not the Greeks who will pay back the borrowing.

And yet. There are some notorious miserable Greeks who wonder “where will the money go?” and “why now since there is no need for immediate borrowing.”

Last week Greece secured the next bailout tranche of total 11 billion euro from the EU and the IMF and the money will start flowing in May. So why return to the markets and borrow with 5+% interest rate when there is no immediate and urgent need?

PS it’s elections time, folks, and the government desperately needs a success – an economic success, of course.