A new 10-year Greek bond launched on Tuesday attracted strong investor interest with bids exceeding 20 billion euros so far, pushing the interest rate of the issue lower to 4.4% from 4.5% initially.
The Public Debt Management Authority plans to raise up to 3.0 billion euros from the issue, covering around 40% of its borrowing programme for 2023. However, the interest rate of the issue is more than double compared with an interest rate of 1.75% of the same issue auctioned last year.
The Authority said that Greece must raise around 15.4 billion euros from the market to cover its funding needs this year, of which around 7.2 billion euros to refinance maturing bonds and 4.5 billion to pay interest on public debt. The finance ministry also plans to reduce the reserve of treasury bills circulating in the market by around 1.0 billion euros in 2023.
According to the borrowing plan, 7 billion euros will be covered with new bond issues and the remaining 4.2 billion through other funding sources such as the EIB, RRF, etc. The finance ministry also plans to raise 2.0 billion euros from its privatisation programme, while it is examining the issue of its first green bond to support the implementation of its sustainability agenda. The government's borrowing needs this year are lower due to an expected 1.7-billion-euro primary surpluses projected in the state budget.
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