Greece sold bonds for 1.3 billion EUR on domestic market

Noam Stiekema

Greece successfully placed 3-month government bonds worth at 1.3 billion EUR on domestic market, but at a higher yield. The auction was a test of the ability of Athens to get financing amid the shortage of funds, notes Reuters. The frozen financial support of its creditors and the fact that foreign investors shun its debt, […]

Greece

GreeceGreece successfully placed 3-month government bonds worth at 1.3 billion EUR on domestic market, but at a higher yield. The auction was a test of the ability of Athens to get financing amid the shortage of funds, notes Reuters. The frozen financial support of its creditors and the fact that foreign investors shun its debt, Athens is trying their best to meet your monthly financial needs. In March, the country must repay issue short-term government securities and return 1.5 billion EUR from the International Monetary Fund (IMF).

The yield, which the Greek government received for securities was 2.70% – 20 basis points higher compared to the previous auction, held in February. The coverage ratio was 1.3 – just as much as during the auction last month. This is a signal that there is no change in demand despite tight liquidity conditions. Local banks bought a large part of the debt, because they are aware that the country may fail if there are no buyers.

Athens will be sent to a new test on March 20, when you need to refinance maturing securities for another 1.6 billion EUR. Emissions of the internal market are the only option for financing available to the Prime Minister Alexis Tsipras and who have yet to obtain permission from the European Union and IMF to increase the emission ceiling. Greece has already reached the limit of 15 billion EUR set by creditors.

Government asked to raise the ceiling, as foreign investors have avoided the local market. Greece’s European partners refuse to do so because of concerns that it would be perceived as a direct financing to the government. Representatives of the Greek Parliament and the EU will meet in Brussels on Thursday to try again to find a solution to the Greek debt problems. With the growth of budget revenues in January Greece will use all available means to cover its costs in March, among which are the salaries and pensions of 1.5 billion EUR. The country will take more than 500 million EUR of bank rescue fund, revealed to Reuters persons familiar with the intentions of the government.

Moreover, the government is exploring the possibilities of using the cash reserves of pension funds and state-owned enterprises through repo transactions.

Today there are other news about the Greek banking sector. National Bank of Greece (NBG) intends to sell another 13% of its stake in its Turkish subsidiary Finansbank by the end of 2015, told Reuters representatives of banking. The sale will be by agreement with the Directorate-General “Competition” of the European Commission. By NBG and Finansbank reported that planned rights issue and sale of shares by the end of April this year, after which the share of the Greek vault in its Turkish unit will decrease by 99% to 73%.

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