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Debt management agency looks to exotic options

The Hellenic Republic plans to look into the possibility of using exotic derivatives to better manage its debt portfolio, says Spyros Papanicolaou, director general at the Public Debt Management Agency (PDMA).

"We plan to borrow about €35 billion this year, with redemptions equal to €25 billion compared with gross borrowing of €37.5 billion in 2004," he says.    

By end-May, Greece had borrowed a total of €24 billion. It privately placed €3.5 billion of 12-year FRNs with five Greek banks and auctioned a three-year, 2.9% bond  for a total of €4.4 billion. It also auctioned treasury bills of 13-, 26- and 52-week maturity for €1.14 billion. It has also raised €15 billion via five-year, 10-year and 30-year bond syndications.

The €5 billion, 4.5% ultra-long bond maturing on September 20 2037 was issued in March at 26 basis points over German Bunds.

The €5 billion, 3.7%, 10-year syndicated bond was issued in February at 19bp over Germany. 

The  €5 billion, 3.1%, five-year syndicated bond was issued at 13bp over the German benchmark bond in April. The expanded spread reflected tougher market conditions. 

Market participants expect a total of  about €17 billion will be raised via syndications and some e6 billion from private placements this year, with the rest coming from auctions.

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