With its e2.5 billion 2010 benchmark international bond launched in February, Greece has, in capital market terms, established itself as a de facto member of the eurozone. The launch price of 53 basis points over Bunds was the lowest cost of borrowing for Greece ever on such a deal, and marked a substantial reduction from the spread levels on previous deals in the high 50s.
That the new bonds found eager buyers at 10bp over Euribor, the equivalent of 53bp over Bunds at launch time, was nothing short of impressive, says Amir Shariat, head of debt capital markets, Greece, at Deutsche Bank. "This was just 20 to 25 basis points above the largest Emu benchmarks provided by Italy."
The issue, which was jointly arranged by Deutsche Bank, Credit Suisse First Boston, Morgan Stanley Dean Witter and the National Bank of Greece in February 2000, has also performed well in a generally volatile secondary market, trading at Euribor Xat three months after launch. "Considering that most other European countries have widened over the last six months versus the German Bund, the fact that Greece tightened to Euribor Xat is a great achievement, and underlines the credit strength of Greece," says Shariat.