Market shows appetite for bond swap

Government officials described the process of reopening Greek three- and five-year bonds to replace existing treasury bills as “very successful” on Thursday.

Sources said that offers from investors who hold T-bills and wish to exchange them for the new bonds have exceeded the target of 1 billion euros, and have even offered more than 1.5 billion. However, that does not mean that all will be accepted by the Finance Ministry.

Offers were submitted both by local investors and foreigners, the latter of whom have significantly upped their T-bill holdings in the last few months, and it is unlikely that the origin of the offers will play a role when it comes to deciding which to accept.

The Public Debt Management Agency (PDMA) was assessing the offers in a bid to determine the final amount to be exchanged up until late on Thursday, with the official announcement expected on Friday.

The ministry is now turning its attention to Greece’s next two moves in the markets, which appear to be both important and imminent. The first will concern the issue of 18-month T-bills to satisfy the demand expressed by investors, probably next month. The second will be the auction of new, seven-year bonds, thereby further improving the range of titles available in the Greek bond market.

The ministry is also hoping that Standard & Poor’s will upgrade Greece’s credit rating on Friday, given that the country’s fundamental fiscal figures have shown a major improvement in recent months.