Greece Looking to Raise €5B in Third Bond Offering of 2010

In its third syndicated bond offering of the year, Greece is seeking to raise up to €5 billion ($6.71 billion) just four days after an announcement from the European Union that the country needs a contingency plan.

The seven-year bonds being offered by the EU’s most indebted member will yield 6 percent or 334 basis points more than similar bonds offered by Germany. Comparatively, trouble nations such as Spain and Portugal are 61 and 114 basis points, respectively, higher than the German bonds.

Earlier Greek officials said that they had not wanted to pay this far above what Germany pays in the bond markets to borrow money. Petros Christodolou, head of the Greek Public Debt Management Authority said, "Given the peculiarity of a seven-year offering which targets only specific investors, the placement was very successful."

In efforts to battle its mountainous debt, Greece has sold €18 billion worth of bonds so far this year. On March 4, the country sold €5 billion worth of 10-year bonds at nearly the same percentage rate of the latest sale.

As Greece struggles to move out of the current budget crisis, this next bond offering should be a significant test.

If Greece is forced to continue to pay a yield around 6 percent, the country could face additional trouble down the road when the bonds mature.

You May Also Be Interested In

• Deutsche Bank calls Treasury buyback doubling similar to ’operation twist’
• Barclays upgrades American Tower and Crown Castle on valuation, growth catalysts
• Coty stock tumbles as lack of visibility, RBC downgrade overshadow Q4 beat