The deadline ends today for investors to agree to the government’s offer of an optional swap of 20 old series of bonds, issued in the context of Greece’s 2012 PSI (private sector involvement) debt write-down, with five new bond series with a total value of 29.7 billion euros.
Sources close to the process, which ends this afternoon, maintain that, “the percentage of participating bondholders has surpassed all expectation as, in this type of swap, if participation exceeds 30 percent that is considered a success, and all the more so when Greek bonds are involved”.
It should be noted that foreign investment houses and analysts came out in favour of the swap.
A recent report issued by Nomura noted that a high level of participation was expected in the Greek swap.
The report stated that the bond issue facilitates Greece’s objective of returning to the markets in 2018.
Although the swap will not add cash to the public coffers, it is of the utmost importance for the Greek bond market, as a high level of investor participation will signal the stabilisation of the Greek economy.
A top aim of the finance ministry is for Greece to return to the markets immediately after the completion of the third bailout programme evaluation.
If all proceeds smoothly as planned, and if there is final approval of the evaluation by the time of the 22 January Eurogroup meeting, then the Greek finance ministry will proceed with a new bond issue in February.
Sources tell To Vima that there are plans to issue a three-year bond with a value of between three and five billion euros.
The aim is to proceed with up to four bond issues before Greece exits the bailout memorandum next summer, so as to build up a 15 billion euro capital cushion.
That amount is expected to cover Greece’s borrowing needs until the end of 2019.