Reopening of bonds in exchange for treasury bills

By Sotiris Nikas

Greece is on Thursday set to reopen the three- and five-year bonds originally issued earlier this year, aiming to exchange them for existing Greek treasury bills.

The Public Debt Management Agency (PDMA) announced on Wednesday that it will top up the bonds by accepting T-bills worth at least 1 billion euros, but sources told Kathimerini yesterday that this amount may well be around 1.5 billion euros.

The process will be open to any investors, Greek or foreign, who hold T-bills expiring between September 19, 2014 and March 6, 2015. All four Greek systemic banks are said to be keenly interested in acquiring the new bonds. In fact it is precisely the banks that this reopening is directed at, so that they can negotiate the bonds they hold in the secondary market and support it when it is harmed by any negative news – an option banks did not have until today.

This move by the Finance Ministry is not aimed at increasing the country’s borrowing. As the PDMA statement clarifies, it is being implemented in the context of the state’s expanded program for the optimum management of its debt.