What’s that you say, Greece? You’re issuing more bonds? Oh wait, no…
We’re confused. Earlier today the WSJ quoted officials saying they are planning to issue a new series of bonds. But, then the Greek debt agency denied it.
According to the WSJ, Greek officials whispered plans for possibly two issues:
“Greece would like about €10 billion from bond issuance in March,” said one official. “There will be one or possibly two debt syndications.” The official added that amount will be “a good cushion before the big debt maturities in April and May, but there is no guarantee that this amount will be raised.”
And then — BAM! — within hours we had an on-the-record denial, as Reuters reports:
“There is no decision regarding new issues,” PDMA Chief Petros Christodoulou told Reuters. “We are not looking to issue soon.”
‘Soon,’ of course, is not a very specific word. And Greece has form on this front – denying fund raising stories that turn out to be rather well informed.
No matter.
As the FT reported, the beleaguered state successfully issued 10-year bonds last week. The issue was heavily over-subscribed, but Greece will also have to pay up:
The coupon interest rate on the bond was 6.25 per cent, about 2 percentage points more than Portugal – seen as the next weakest eurozone country – is paying and double the rate paid by Germany, Europe’s biggest economy.
It makes sense that Greece at least feels as though it only has a small window in which to raise additional funds. Reuters has reported warnings by Moody’s and Standard&Poor that any slippage with the country’s new austerity plan could result in immediate rating cuts. Standard & Poor has also hinted at a downgrade over the next few weeks:
Moody’s has warned that anything short of near perfect delivery could trigger a rating cut, and Standard & Poor’s said it could downgrade Greece within the next couple of weeks. Fitch also has the country on negative outlook. Any new downgrade would pressure Greek bonds and the euro.
So, back to those whispers in the journal:
The second official said the government will also attempt to borrow between $5 billion and $10 billion through a separate bond offering targeted at investors in the US and Asia. “The plan to go to the US and Asia is still on,” he said. “It will likely happen after mid-March or in April. The plan is to raise between $5 billion and $10 billion from the global bond.”
Let’s see what happens. Let’s see whether Mr Christodoulou at the PDMA is a man of his word.
Related links:
Investors back Greek bond issue – FT
FACTBOX-Key risks to watch in Greece – Reuters
Greece v everyone, BaFin and speculators edition - FT Alphaville