October 8, 2019 / 4:00 PM / 5 days ago

UPDATE 1-Greece raises 1.5 bln euros from 10-year bond reopening, draws strong demand

(Recasts with finance minister’s comments, details, banker quotes)

By Lefteris Papadimas and Yoruk Bahceli

ATHENS/LONDON, Oct 8 (Reuters) - Greece drew strong demand the reopening of its 10-year bond on Tuesday, marking what Finance Minister Christos Staikouras called another step in the return of its economy to “full normalcy”.

The country raised 1.5 billion euros ($1.65 billion) from a sale that attracted offers worth more than 7.6 billion euros, according to a document from lead managers seen by Reuters.

The issue is Greece’s fourth since it emerged from international bailouts last year and came a day after the unveiling of its 2020 draft budget, which aims for higher growth and investments.

Staikouras said the issue showed the country is “strengthening its credibility in international markets and is creating, step by step, the conditions for its return to full normalcy.”

Greece has already covered its annual target to raise 7 billion euros from debt markets. It wants to establish a continuous presence in the markets and show it can refinance itself alone, without external support.

“You’re seeing more and more real money investors returning to this market - there’s been strong real money participation all year but it’s definitely continuing in terms of that part of the investor base,” a banker on the deal told Reuters.

About 55 billion euros of Greek debt is traded in the markets, out of a total of around 330 billion euros. The rest is held by its official lenders, the European Stability Mechanism, the International Monetary Fund and the European Central Bank.

Yields of Greek bonds have dropped to record lows the last few months. The country issued in March its first 10-year bond since plunging into a debt crisis in 2010, with a yield of 3.90% and a coupon of 3.875. It has fallen to 1.37% since then.

The new bond was priced to yield 1.50%, five basis points down from initial guidance of 1.55%, the highest among eurozone countries in this tenor.

Greece can stay afloat without recourse to markets up to 2022 thanks to a 34 billion euro cash buffer it has built with unused loans and money raised from markets.

$1 = 0.9102 euros Reporting by Lefteris Papadimas, Yoruk Bahceli Editing by Tommy Wilkes and Tom Brown

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