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UPDATE 1-Greece offers yield of 4.95% against blow-out demand
April 10, 2014 / 8:46 AM / 3 years ago

UPDATE 1-Greece offers yield of 4.95% against blow-out demand

LONDON, April 10 (Reuters) - LONDON, April 10 (REUTERS/IFR) - Two years after being at the epicentre of the European sovereign debt crisis, Greece has returned to the bond markets to much fanfare with a heavily subscribed 3bn five-year deal offering a yield of just 4.95%. The new transaction, which marks Greece’s first international bond issue in four years, has attracted more than 20bn of interest from over 550 investors, including 1.3bn of lead manager interest. The bond’s success is shaped by the low-yield environment and is in great demand with investors as they cast aside memories of the painful haircut Greece inflicted just two years ago. “Yields everywhere have been falling, and so, like in many asset classes, investors will be getting paid something for the risk that they are taking, but that risk premium is probably below historical levels for a commensurate risk,” said Colm D‘Rosario, senior portfolio manager, emerging markets and high yield, at Pioneer Investments. Earlier on Thursday, guidance was set at 5% area with the order book over 17.5bn. Greece began marketing the deal on Wednesday afternoon, when US bond markets opened, with a 5%-5.25% range. The deal is seen by some investors as the culmination of an impressive recovery and restructuring story. One portfolio manager based in London said it is still quite wide compared to Portugal and that the spread will tighten further. “I would say it can get to 4.625%, as there will be much unsatisfied demand,” he said. Greece’s five-year benchmark bond has traded with brokers at 4.8% in the so-called grey market. 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-. (Created by Malcolm Davidson)

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