Its premiere on the markets is held today by the company Hellas for 2023 – barring unforeseen circumstances and conditions permitting – with a syndicated issuance of a new 10-year bondin the context of a forward-looking strategy followed by public debt management organizationdue to further interest rate increases expected from the European Central Bank, as well as national elections, which may cause volatility and instability in the market.

Thus, Greece follows a host of other eurozone countries that entered the markets this month, and analysts estimate that 40-50% of all issuances this year will occur in the first half of the year.

The issuance process was carried out by six international banks, Barclays, BofA Securities, Commerzbank, Goldman Sachs, JP Morgan and Société Générale, and the new bonds expire on June 15, 2033.

Financial needs

The aim is to raise 2-2.5 billion euros, with the final amount shaped by proposals to be submitted by investors, given that 4 billion euros worth of Greek bonds expire at the end of the month. However, Greece does not need to raise large sums, as market borrowing is set at 7 billion euros for the whole year – and at 8 billion euros if a green bond is issued.

Most eurozone countries have already started issuing bonds, the demand for which is quite high.

As for the interest rate, it is placed at the level of 4.6%-4.7% (compared to 4.15%, which was formed yesterday by the yield of the existing 10-year Greek bond), i.e. about 185-195 basis points above the average euro swap, which is moving towards 2.75%. However, the real cost for the Greek state will be below 3% thanks to the portfolio management strategy that ODDIX has implemented, managing to overcompensate interest rate risk. It is worth noting that debt financing needs are estimated at 10% of GDP this year (from about 15% in 2022) and will decrease significantly thereafter.

ODDIX believes that Greece has no reason to wait any longer to enter the markets, despite the fact that the first assessment of the country for 2023 from Fitch is expected at the end of the month, while analysts do not exclude an increase that will improve the image of Greek bonds. Such a move can also be the reason for the second “exit”.

After all, most of the eurozone countries have already made their first market entry this year, and demand for them has been quite strong (although Italy’s recent 20-year release was not as successful). The overall market environment was supported by data on euro zone inflation, which fell below 10% in December, although investors still “see” the ECB’s final interest rate at no less than 3.5% (from 2% today).

In the coming days, big releases are expected from Spain, Germany, Holland, the EU, France, Italy and other countries.

Elections

Of course, national elections are also in ODDIX “thoughts”. Given that the electoral process is expected to take a long time and cause a period of market volatility, as indicated by the international houses, it is logical to prefer to cover a significant part of the publishing activity a year in advance. Moody’s has confirmed in a new report that domestic political risks are higher for countries approaching elections, especially for countries with already unstable political dynamics or socio-political problems such as high income inequality and youth unemployment, which are clearly visible and are major problems in Greece. . Spain and Italy. However, the House stressed that Greece will be one of the countries that will record growth in 2023, compared to 60% of the eurozone countries that will be in recession, while our country is estimated to record the largest reduction in international debt in 2019. . 2023, as it will form at 162.9% with a cumulative fall of 18%.