MNI: Greece's EUR8 Bln Bonds In 2026 Mostly From 10-Yr-Source

The Greek Public Debt Management Agency plans to issue EUR8 billion in 2026, with up to EUR5 billion coming from a 10-year bond and sales of other maturities depending on investor appetite, a source in the country’s treasury told MNI.

It is likely that low market appetite seen in 2025 for very long maturities will repeat in 2026, due to yield curve steepening, the source said, adding that Athens will prioritise giving supply to the market and that Greece’s average maturity is long compared to other countries’. A possible EUR3 billion in sales of a five-year bond would have a negligible effect on average maturity, he said.

“We will do our best to best to achieve the eight billion target,” the source said, noting that in 2025 the country will have issued EUR7.6 billion from an initial target of EUR8 billion.

The stock of Greek T-bills has fallen 50% in recent years to EUR 7-8 billion, and the debt agency will roll this over to preserve liquidity in the short end of the curve, as the country continues to register primary fiscal surpluses of around EUR10 billion, the official said.

Annual gross financing needs for the next three to five years will be around EUR15 billion, including EUR10 billion for amortisation and EUR5 billion in interest.

“What really matters, as far as the funding activities, is the actual payment. So, if you need to raise 15 billion from the capital markets, 15 billion, on average, and your primary surplus is 10 billion, I think it covers your interest payments, actual interest payments. Even the accumulated interest of the deferral of interest payments exceeds by three billion the last number of amortisation from the latter, and five billion the actual,” the official said. (See MNI: Portugal Sees Improving Foreign Demand For Bonds)

EARLY REPAYMENTS

Earlier this year, the country announced that it will early pay off EUR31 billion in European Union bailout loans by 2031 instead of 2041, and the source said the date could potentially be brought forward to 2030 or 2029. He pointed to a EUR5.3 billion payment planned for Dec 15 and expressed confidence that Greece will not have to dip into its EUR46 billion in cash reserves over the next few years to make early repayments.

The perception of Greece in financial markets is in “kind of a limbo situation,” the official said, noting that demand for the country’s debt was aggressive two years ago prior to its regaining investment grade. The next surge in demand could come in one or two years’ time, and include Asian investors, “when we will be at BBB+ levels or close to BBB+,” he said, adding that by that time Greece will no longer have the highest debt-to-GDP ratio in the euro area, and will be approaching an A rating.