Greece announces new bond issue ending three-year market exile

"Our return to the markets is an especially important landmark in the course toward exiting the crisis", Prime Minister Alexis Tsipras tweeted on Tuesday.

Greece is set to issue new five-year bonds yielding around 4.75% on Tuesday, in a deal that also involves buying back debt due in 2019 that was sold during Greece's last, brief period of market.

It is an important symbolic move, the first time Greece will have raised private debt since 2014, and a sign that the country has come a long way since it nearly crashed out of the euro zone in summer 2015.

That development opened the way for Greece's market foray, which the Tsipras government says should be viewed as a test run and considered part of an overall strategy to ensure the country can fully return to markets next year.

Goldman Sachs, Citigroup, Deutsche Bank, HSBC, BNP Paribas and Bank of America will manage the offering.

The European Stability Mechanism (ESM) will also keep feeding the debt-ridden country with low interest rate loans (0.8 and 1.8 percent) until the end of the bailout programme in July 2018. Following the announcement that Athens would be returning to the market, the yield fell to 3.4%.


It's the first time since the new Greek government was formed in 2015 that such a measure had been taken, the Greek Finance Ministry confirmed.

Reuters first reported a year ago that Greece was considering the possibility of two or three small bond issues before the expiration of the present bailout programme.

Earlier this month, eurozone finance ministers approved the latest 8.5 billion-euro ($9.9-billion) disbursement from its third worldwide bailout, just in time for Athens to meet major debt repayments.

In a sign that the country is turning a corner the economy is projected to grow by 2.1 percent this year - after no growth at all in 2016.

Greece was at the centre of the European sovereign debt crisis that erupted in 2010 and has had three bailouts from the European Union, European Central Bank and the International Monetary Fund.


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