LONDON, April 9 (IFR) - Greece is lining up a euro five-year bond sale to take place on Thursday, according to three sources.
Two market sources and one government source said that the book for the transaction would open on Thursday. The government source said there will be an announcement by the Public Debt Management Agency later on Wednesday.
Market participants said the government is targeting a yield of less than 5% on the new bond. The current yield on Greece’s 2024 bond is around 6% according to Tradeweb, and around 220bp more than 10 year Portuguese bonds.
This is an important milestone for one of Europe’s most troubled economies. The last time Greece had access to capital markets was back in March 2010, when it issued a five-year bond at 310bps over mid-swaps.
Since then, there are have been two bailout programmes worth 245bn. Investors in Greek bonds suffered a 53.5% notional haircut in February 2012, and they participated in a bond buy back at an average price of 33.5% of par in December 2012.
Greece is rated nine notches below investment grade at Caa3 by Moody’s. Standard and Poor’s and Fitch rank Greece six notches below investment grade at B-. (Reporting by Alex Chambers, additional reporting by George Georgiopoulos; editing by Sudip Roy)