October 23, 2018 / 11:55 AM / a month ago

Greece in no rush to tap markets, likely to act when yields fall- ESM

LUXEMBOURG, Oct 23 (Reuters) - The head of the euro zone’s rescue fund said on Tuesday Greece had no urgent need to issue new debt for the coming two years but urged a gradual approach with a possible new issuance when sovereign yields drop from current levels.

Greece exited its third bailout in a decade in August. As part of the financial programme, euro zone lenders gave Greece a last tranche of loans worth 15 billion euros ($17.19 billion) to bolster a cash buffer against market pressure for a couple of years. As a consequence of that deal, “now there is no urgent need for them to go to the markets,” Klaus Regling, who chairs the European Stability Mechanism rescue fund, told a news conference. He said the Greek cash buffer now stood at 22 billion euros, which meant that “they don’t need to go to the markets for two years.”

However, he added that Greece’s full return to market financing should happen gradually with a possible new issuance before 2020 following two “quite successful” auctions last year.

“The secondary market’s yields are higher than they were six months ago. I would expect when secondary market yields come down again they (the Greek authorities) will do it,” Regling said.

The head of the rescue fund underlined that it was a decision that Greece would make on its own while taking into account national and international developments.

“I am confident they will do the right thing,” he told reporters. ($1 = 0.8725 euros) (Reporting by Francesco Guarascio Editing by Raissa Kasolowsky)

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