His decision turned out to be absolutely correct. Public Debt Management Agency go to the markets at the very moment when election season and at the same time capitalize on the improving situation in the bond market, which acted as a safety net for investors during the crisis. banking turmoil which started in the USA and continued in Europe.

Demand for it new 5 year bond released on Wednesday was particularly strong and exceeded 19.1 billion euros, confirming that investors they continue to view Greece as a safe and profitable “bet” and do not “see” any risk to the fiscal on the eve of the elections. At the same time, according to market estimates, this may be the last syndicated issue in the country this year, and the issuance of green bonds remains possible in the second half of the year, which also spurred demand.

Greek Public raised 2.5 billion euros from a 5-year period, thus covering already from the first quarter of the year more than 85% of total loan needs in 2023 after 3.5 billion euros raised from a 10-year period in January. More than a third of the issue was distributed to Greek investors, mainly banks, while in terms of the total investment base, only 6% was distributed to hedge funds, 44% to banks, 36% to fund managers and pension fund balances, etc. e. The interest rate of the new 5-year issue was set at 3.919% (slightly lower than the original, which was set at 3.97%) and the coupon was set at 3.875%. However, thanks to the active portfolio management strategy that ODDIX has implemented in recent years, having managed to overcompensate interest rate risk (overhedging), the real cost of a new issue for the Greek state is 1.819%, i.e. 2.1%. below.

The option of issuing a 5-year bond was the most “safe” option at the moment. The tightening of the ECB’s monetary policy and the associated changes in expectations caused significant volatility in eurozone bonds, however, 5-year Greek bonds showed the greatest resilience, showing limited volatility.

Such as notes in “K” Antoine Bouvet, chief analyst at ING, “Greek 5-year bonds reversed their recent lagging behind Italian bonds, suggesting markets have taken the new issue very positively, as evidenced by healthy demand for it.” The 5-year was probably a more conservative choice than the long-term, but ODDIX already issued a benchmark bond in January (10-year).”

As of the first quarter, 85% of loan needs have been covered this year.

According to Mr. Bouvet, the publication was a complete success, especially given that it came between the banking turmoil at the international level and the announcement of the election date in Greece. “In general, many are surprised at how strong the region – and Greece is, even in times of heightened systemic risk, which is an encouraging sign,” he adds.

While ODDIX’s timing surprised many, as it released two releases in the first quarter for the first time in years, it proved to be right again. There is no need for liquidity. As Minister of Finance Christos Staikouras noted, “the vast majority of the country’s borrowing needs have been covered this year, providing high cash reserves for the post-election period, which again exceed 38 billion euros.”

However, ODDIX wanted to prevent the possibility of an escalation of the pre-election standoff in the next two months, which could put pressure on and increase the volatility of the Greek state’s borrowing costs. Also, since the scenario of a second round of elections is the most likely, which means that the next government will be formed in the very height of summer, September was the next “window of opportunity” for ODDIX. This means that until then it will be forced to stay out of the markets, which is not the best “sign” for a country that wants to regain investment status.

Thus, Greece simultaneously proved that it can borrow even in the midst of banking turmoil. In addition, as ODDHI CEO Dimitris Tsakonas pointed out at a recent conference, Greece’s public debt is risk-free. “There is confidence that things will not go wrong, the debt has a weighted average duration of 20 years, the cost of servicing is currently 1.4% and falling, so it looks like a bond with a maturity in 20 years with a fixed interest rate of 1.4%” , – he said.

This was also pointed out by Goldman Sachs in its report, emphasizing that while the cycle of raising interest rates leads to higher borrowing costs, Greek debt is less vulnerable than the debt of other countries. As he noted, this is due to two main reasons. Firstly, the longer duration of Greek debt and secondly, an increase in nominal growth, which is expected to remain at about 4% until 2024, as well as cautious fiscal forecasts, according to which the primary balance will continue to grow in 2023 and 2024 . According to him, it may lead to the restoration of the investment rating even before the elections, namely on April 21, according to S&P. According to Goldman Sachs forecasts, the debt-to-GDP ratio will decrease by 19.5% in the period 2022-2025.