* Greece sells 4.062 bln eur of 1-, 3-month T-bills
* Non-competitive bids to raise enough for full debt
* Three-month yield drops to 4.2 pct; bid-cover ratio 1.66
By George Georgiopoulos
ATHENS, Nov 13 Greece on Tuesday raised most of
the funds it needs to refinance 5 billion euros of T-bills this
week and avoid a default, and it expects to bring in the rest by
Shunned by international investors and financed mainly
through its bailout lenders, Athens's only source of market
funding comes from its monthly T-bill sales.
Greece's debt agency, PDMA, sold 4.062 billion euros ($5.14
billion) of one- and three-month treasury bills, including 937
million euros in non-competitive bids.
Athens has won approval from the European Central bank to
increase its stock of T-bills so it can continue rolling over
short-term debt, as its international lenders have delayed the
next aid tranche due under its bailout programme. The government
plans to pay down the one-month T-bills once it gets that money.
Global markets had shown signs of nervousness ahead of the
T-bill sale, but primary dealers in Greece, who take up the
majority of the paper, said Athens would have no problem rolling
over the debt.
"There was no anxiety at any treasury here that the auction
would be filled. By Thursday the full 5 billion euros will be
raised through supplementary bids," said a treasurer at an
Athens-based bank who declined to be named.
PDMA traditionally accepts non-competitive bids worth up to
30 percent more than the amount it auctions on the same day and
another 30 percent two days later.
Primary dealers can submit such bids until Nov. 15. They
traditionally take up all the debt allowed. This has been the
debt agency's standard practice for years, to fine-tune the
proceeds from its debt auctions with the government's cash-flow
CRISIS RAGES ON
Greek banks traditionally buy the bulk of T-bill issues,
meaning funding costs do not fully reflect the strains from the
country's debt crisis. Banks can deposit the bills as collateral
with Greece's central bank to receive funding.
PDMA sold one-month T-bills at a yield of 3.95 percent.
Three-month T-bills were priced to yield 4.2 percent, compared
to 4.24 percent in a previous sale in October.
The bid-cover ratio in the auction of 3-month paper was 1.66
versus 1.9 in the Oct. 16 sale.
"It's very short-term paper and it's a rollover so it went
OK. The important part was less the bid/cover but that there
wasn't a big rise in three-month yields relative to October,"
said Marc Oswald, a rate strategist at Monument Securities in
"But there are still a lot of important issues to be
resolved for Greece. The crisis is far from over," he said.
Athens stepped up its T-bill issuance in August this year to
repay a 3.2 billion euro bond that was held by the European
Central Bank, raising the funds in a 3-month T-bill sale.
"Everything is in place to cover the next redemptions. I
think European politicians and Greek politicians knew that
already. The main thing now is to find an agreement for the next
tranche to pay back the bills next month, and this discussion
hasn't finished yet," said ING rate strategist Alessandro
The aid tranche has been delayed after the country's
economic adjustment programme got off track, but Athens has
since passed a tight 2103 budget and a 13.5 billion euro package
of wage and pension cuts and tax hikes.
The government has said its cash reserves are nearly
"We expect that the next aid installment may be released
before the one-month T-bills expire," a finance ministry
official told Reuters, explaining why Athens also opted for a
one-month issue in Tuesday's auction.
France's finance minister said on Tuesday that lenders aimed
to disburse more fund to Greece by the end of November.