The bid book has been opened for a new 15-year bond, close to 4.5% initial interest rate.

By Eleftherias Kortalis

Opening the bid book for the new 15-year bond issue, with the initial interest rate set at 130 basis points above average swap (3.2%), approximately 4.5%. The objective is to take advantage of the positive momentum registered around Greece after the election results, to implement the commitment to a continued presence in the markets as well as to implement the ODDIX plan to reduce financing needs, and thus early debt reduction, which will be achieved through the exchange of bonds maturing within the next two years.

BNP Paribas, BofA Securities, Deutsche Bank, Goldman Sachs Bank Europe SE, JP Morgan and National Bank have pledged to “run” both measures, boosting the chances of Greece soon regaining investment grade.

The timing of the 15-year-old’s release has to do with many factors. Although Greek bonds have outperformed significantly this year, coming very close to Spanish bonds and now trading with less strength than Italian bonds, monetary tightening will continue until at least September with two more rate increases, which means the cost of borrowing will almost certainly be more expensive in the fall. .

After all, it really did pick up this month, with the 10-year yield moving to 4.03% from 3.5% at the end of June. At the same time, it is estimated that the spread will also move up.

Moreover, even though Greece “worth” an investment grade that is widely recognized by analysts, no one knows how the homes will fare.

So ODDIX is working proactively and is now entering the markets, even if it has already covered the initial target of its planned deployment activity this year. In particular, with €3.5 billion raised during the January exit with the new 10-year note, €2.5 billion from the new 5-year bond issue in March and €900 million that was from the second quarter auctions, ODDIX was already Before the middle of the year, before the second round of elections, it has raised 6.9 billion euros, which almost completely covers the 7 billion euro loan program for 2023. In addition, for the second half, four bonds will be reissued on July 19, September 20, October and 15 November.

At the same time, and in conjunction with 15 years, ODDIX has issued an invitation to bondholders holding bonds due on 4/2/2024 yielding 3.450% of €2.5 billion and bonds maturing on 2/15/2025 yielding 3.375% of €3 billion 2018, to exchange them today At 100.15. The process will begin after the completion of the 15-year version.

Essentially, ODDIX settles short-term liabilities, reducing the financing needs of the Greek state in the next two years.

In 2024 and 2025, bond payments are set at €18-19 billion. With the €5.5 billion of bonds exchanged, financing needs would “fall down” to €12.5-13.5 billion, if and as long as all securities are exchanged.

In the same context, the decision to early repay the two installments of bilateral loans of the first note (about 5.4 billion euros) scheduled for the end of the year sends a strong signal of commitment to a rapid decline in the debt index to GDP as well as to debt in absolute numbers.