Bond

Greece plans four bond reopenings via auctions in the second half of the year to boost liquidity on the secondary market, the Public Debt Management Agency (PDMA) said on Tuesday.

Markets are expecting Greece to regain investment grade soon after Sunday's general election, provided that a strong government comes out of the process. When Greek bonds emerge from the "junk status" they have been at for more than 12 years, they will not be the only ones to benefit.

Alpha Bank on Wednesday announced it had successfully completed the issuance of a 500-million-euro senior preferred bond.

The issue attracted strong demand amounting to €1.3 billion, or roughly three times the initial target of €400 million.

Greece on Wednesday successfully completed an auction of a 25-year bond reopening, with bids exceeding 1.2 billion euros, six times more than the asked sum of 200 million.

Spain's BBVA and Bank of Cyprus reopened the market with the issuance of the first euro-denominated contingent convertible bonds (CoCo) since the rescue of Credit Suisse in March, in what is seen as an attempt to restore confidence in the banks' riskiest debt instruments.

Investors' perception of Greece has changed dramatically as is clearly seen from its performance in the bond market.

Τhe 10-year Greek benchmark bond yield has this week fallen to its lowest levels in 10 months, returning to levels last seen in August 2022. 

Traders said market sentiment remained positive despite comments made by European Central Bank officials over the possibility of fresh interest-rate increases. 

Greek bonds are already trading as though the country has regained investment grade, bank analysts that deal with Greek government debt told Reuters on Friday, with the news agency reporting that investors consider Greece's return to investment-grade credit ratings "a done deal."

Greece's bond prices outperformed their peers on Monday as investors reckoned the outcome of general elections was unlikely to lead to a deviation from the current fiscal discipline.

Cheaper access to the markets for raising liquidity and financing the economy will be the first benefits to be felt by local banks from the recovery of investment grade by the Greek state. This is expected to occur in the first half of 2024 or perhaps earlier depending on the outcome of the elections and political developments.