ATHENS, Greece (AP) - Greece has raised money on international bond markets for the first time since emerging from its bailout programs last summer, getting 2.5 billion euros ($2.87 billion) Tuesday in a five-year bond auction.
Finance Minister Euclid Tsakalotos announced the results of the auction in parliament, ahead of the formal statement by the country’s Public Debt Management Agency.
“Today’s successful bond issue has been completed,” he said. The bond auction resulted in a yield of 3.6 percent on the bonds and a coupon below 3.5 percent
Tsakalotos said the bond issue covers 36 percent of the country’s financing requirements for the year.
“The most important thing was the investor participation,” he said. “There was a major shift from hedge funds to regular investors.”
Investors bid more than 10 billion euros in the auction, an amount that Tsakalotos said had “exceeded every expectation.”
While affordable, the yield is above what most other countries in the EU would pay for such debt. Germany’s 5-year bond yield is at minus 0.3 percent. The yield for Italy, which has a lot of public debt, is at 1.55 percent.
The Greek government is planning a cautious return to bond markets. Greece exited its third and last bailout program in August with a cash buffer meant to cover financing needs for around two years. It delayed the bond auction due to turmoil in financial markets last year caused by a European political dispute over Italy’s budget.
Tuesday’s bond sale was ordered following the visit to Athens by bailout inspectors and after the government survived the departure of its junior coalition partner over disagreement on a deal to normalize relations with Macedonia.
Greece’s left-wing Prime Minister Alexis Tsipras is trailing conservatives in opinion polls ahead of general elections this year, and has promised to relieve Greeks hardest hit by the crisis. A minimum wage hike of nearly 11 percent goes into effect Friday.
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