Greece

Greece's Piraeus Bank said on Thursday that it would issue a tier two bond with a 10 year non-call five maturity, after announcing last year that it was waiting for the "right timing" to make good on capital strengthening plans agreed with the European Central Bank.

After restructuring its soft bullet programme to a conditional pass through (CPT), Alpha Bank’s covered bonds have been upgraded to Baa3, making them eligible for repo with the European Central Bank, thereby improving their appeal with investors, putting the bank in a stronger position for a return to the market.

Equity investors welcomed the prospects of elections in Greece, sending bank stocks up 25% this week. But with banks in the country struggling with non-performing exposures (NPE), the debt market is unlikely to see a change in negative sentiment, said FIG bankers.

The souring of trade talks between the US and China has sounded a bum note this week to what Greece had hoped would be a harmonious market in looking to price its benchmark bond. Bankers now believe the sovereign should wait for a better opportunity.

Greece and the European Stability Mechanism will reinvigorate the euro public sector market next week with benchmark bonds in the short to mid part of the curve, according to bankers.

Public sector bond market participants expect Greece to return to the market next week for its third syndicated transaction of the year.

Greek government bond yields rallied to near record levels this week after it emerged that a deal was imminent for Greece to repay a portion of its outstanding loans to the International Monetary Fund. Burhan Khadbai reports.

Greece is rumoured to be planning a return to the bond market in the summer to fund an early repayment of its loans to the International Monetary Fund.

Greece’s new 10 year benchmark sold last week — its first in that maturity since 2010 — was trading wider in the secondary on Monday before a potential postponement of a €1bn disbursement to Greece by the European Central Bank.

Rating: B1/B+/BB-

Following the success of its first 10 year bond in almost a decade, Greece is looking to have a frequent presence in the debt capital markets. The sovereign may even return with either a tap or a new issue this year, even though it has met its minimum planned issuance of benchmark bonds for 2019 and has a significant cash buffer.

Greece received a huge reception for its first 10 year benchmark in almost a decade on Tuesday, taking advantage of a double upgrade by Moody’s last Friday and strong market conditions.