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Exclusive-Greece to raise up to 7 billion euros from bond markets in 2024

Published 12/09/2023, 15:08
Updated 12/09/2023, 15:13
© Reuters. FILE PHOTO: A Greek flag flutters atop the parliament building in Athens, Greece, March 1, 2023. REUTERS/Louiza Vradi
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By Lefteris Papadimas

ATHENS (Reuters) - Greece plans to raise up to 7 billion euros ($7.5 billion) from debt markets in 2024 through new short- and long-term bond issues and will allow retail investors to participate in Treasury bills auctions, two government sources told Reuters on Tuesday.

The country, which recently regained an investment grade credit rating after 13 years, also plans to continue bond reopenings through auctions of up to 500 million euros each, to add liquidity in specific parts of the yield curve, if needed.

"The amount of about 7 billion euros that we plan to raise from markets might be raised a bit, if we reduce the (outstanding) amount of T-bills in circulation," a finance ministry official told Reuters.

The outstanding amount of T-bills is about 11.5 billion euros and could be reduced by 1.5-2 billion euros in 2024.

Greece has raised about 9 billion euros from debt markets so far this year. In 2022, it raised 8.3 billion euros.

The debt agency auctioned one-year T-bills last week, accepting offers from savers for the first time after years, with a yield of 3.81%, nearly twice the interest rate that Greek banks are offering to depositors.

Earlier this month, Belgium raised a record 21.9 billion euros from savers in a bond sale designed to compete with bank deposits.

"We don't plan to issue such a bond," a second finance ministry official said, adding that depositors can participate in auctions of one-year T-bills.

The officials spoke on condition of anonymity because they were not authorised to speak on the matter.

GREEK DEBT SEEN SHRINKING FURTHER

Greece expects its economic growth to slow to 2.3% this year, from 5.9% in 2022, still outpacing the euro zone's average of about 0.6%. It is expected to achieve a primary surplus of 1.1% this year and of 2.1% in 2024.

"Achieving the primary surplus target in 2024 will suffice to fully cover interest rate payments for the year," the first official said, adding that from 2025 onwards Greece expects its annual surplus will be higher than the interest rate payments.

Since 2020, the country's debt has shrunk by 37 percentage points to 169% of gross domestic product (GDP) in 2022 and is expected to fall to 159% of GDP this year.

Last week DBRS Morningstar upgraded Greece's credit rating to investment grade BBB (low), citing the country's robust growth and the significant improvement in its fiscal plan and debt outcome.

Greece lost its investment credit rating - which implies a low risk of default - in 2010, when it plunged into a near decade-long debt crisis, forcing it to sign up to three international bailouts worth about 260 billion euros to stay afloat.

The country this year plans to repay earlier 5.3 billion euros due in 2024 and 2025, owed to euro zone countries under the first bailout.

Greece emerged from the debt crisis in 2018 and since then it has relied solely on bond markets to cover its borrowing needs.

© Reuters. FILE PHOTO: A Greek flag flutters atop the parliament building in Athens, Greece, March 1, 2023. REUTERS/Louiza Vradi

Rating agencies S&P and Fitch currently rate the country one notch below investment grade while Moody's rates it three notches below.

($1 = 0.9338 euros)

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