Greece Shows It Can Still Raise Money
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Showing that even the most debt-laden countries can still raise money, Greece raised cash it desperately needed with a bond issue on Thursday. The sale came as the country makes strides to avoiding a disastrous debt default as the country tries to climb out of the financial meltdown that has put the European Union in jeopardy.
Within the first hour of open the bonds, the government received a massive influx of offers totaling 7 billion euro ($9.5 billion) within the first hour. According to Greece’s debt management agency chief, Petros Chritodoulou, the country was looking for a maximum of 5 billion euro ($6.8
billion).
"We are pleased because there is very heavy demand, and that means something, it is an indication," government spokesman George Petalotis said.
The expected yield for the bonds sold on Thursday is 6.5 percent, which is more than double the yield on similar benchmark German bonds.
The bond issue came a day after Greece announced several tough austerity measures, including salry cuts for civil servants, pension freezes and tax increases on cigarettes, alcohol and luxury items. The measures are part of the country’s plan to save as much as 4.8 billion euro ($6.55 billion) in its budget this year.
Greece will be forced to borrow roughly 54 billion euro ($74 billion) in sovereign debt issues in 2010, and has raised around 13 billion euro ($18 billion) thus far. The country will see 20 billion euro ($27 billion) in
debt mature in the next two months.
The unstable economy in the Greece has made it difficult for it to borrow at reasonable rates, but the country is seeking strategies to bring in funds at lower rates to combat the rising debt.
The two largest labor unions in the country representing civil servants and the private sector, initiated work stoppages last week to protest the measures taken by Greece's government. Journalists and railway workers in the country plan to walk off the job as well in protest.
Within the first hour of open the bonds, the government received a massive influx of offers totaling 7 billion euro ($9.5 billion) within the first hour. According to Greece’s debt management agency chief, Petros Chritodoulou, the country was looking for a maximum of 5 billion euro ($6.8
billion).
"We are pleased because there is very heavy demand, and that means something, it is an indication," government spokesman George Petalotis said.
The expected yield for the bonds sold on Thursday is 6.5 percent, which is more than double the yield on similar benchmark German bonds.
The bond issue came a day after Greece announced several tough austerity measures, including salry cuts for civil servants, pension freezes and tax increases on cigarettes, alcohol and luxury items. The measures are part of the country’s plan to save as much as 4.8 billion euro ($6.55 billion) in its budget this year.
Greece will be forced to borrow roughly 54 billion euro ($74 billion) in sovereign debt issues in 2010, and has raised around 13 billion euro ($18 billion) thus far. The country will see 20 billion euro ($27 billion) in
debt mature in the next two months.
The unstable economy in the Greece has made it difficult for it to borrow at reasonable rates, but the country is seeking strategies to bring in funds at lower rates to combat the rising debt.
The two largest labor unions in the country representing civil servants and the private sector, initiated work stoppages last week to protest the measures taken by Greece's government. Journalists and railway workers in the country plan to walk off the job as well in protest.
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