{"id":143447,"date":"2019-03-11T13:01:07","date_gmt":"2019-03-11T17:01:07","guid":{"rendered":"https:\/\/www.countingpips.com\/?p=143447"},"modified":"2019-03-11T11:46:51","modified_gmt":"2019-03-11T15:46:51","slug":"greece-returns-to-debt-markets-after-moodys-upgrade","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex\/2019\/03\/greece-returns-to-debt-markets-after-moodys-upgrade\/","title":{"rendered":"Greece Returns To Debt Markets After Moody\u2019s Upgrade"},"content":{"rendered":"
March 11, 2019<\/div>
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By <\/strong>Orbex<\/strong><\/a><\/p>\n

Greek Bond Sale Gains Backing from Investors<\/strong><\/h2>\n

The country\u2019s first bond sale since Europe\u2019s debt crisis raised \u20ac2.5 billion last week. Order books reached a ceiling of \u20ac11.8 billion.<\/p>\n

Investors began snapping up 10-year Greek debt at a 3.9 percent yield. This came after Moody\u2019s, a credit risk rating agency, lifted the country\u2019s rating scale from B3 to B1 earlier in the month. Such progress reduces the likelihood of credit risks around fixed-income obligations. Nevertheless, the credit rating remains classified as speculative.<\/p>\n

Sovereign Debt Demand Sends Greek Yields to 13-Year Low<\/strong><\/h2>\n

10-year yields dropped to 3.6 percent on the session, a low not seen since early 2006. Major Greek banks were up for the day as well, with Greece\u2019s index outperforming Europe\u2019s wider stock index. Moody\u2019s endorsement somewhat verifies that the country\u2019s reform programme has started bearing fruit.<\/p>\n

The sale was the country\u2019s first since it was shut out of international capital markets and was forced to seek the first of its three bailouts.<\/p>\n

Central Banks U-Turn a Cornerstone?<\/strong><\/h2>\n

Greece has ventured into the international capital markets again after the country\u2019s weak attempt to exit the European Union back in 2015. The country has now ventured into capital markets once in 2017, once in 2018 and twice in 2019.<\/p>

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Both attempts prior to 2019 raised \u20ac3bn each at a lower yield of 3.6 percent despite the maturity of the bond itself being lower. The late January 2019 sale \u201cdrew over \u20ac10 billion in demand\u201d.<\/p>\n

Meanwhile, the country only emerged from a \u20ac86 billion punishing bailout in August last year. The sale is the first post-bailout debt sale.<\/p>\n

With Moody\u2019s upgrade and the market\u2019s appetite for higher-yielding longer-dated bonds, Greek markets are starting to thrive. Besides the urge for greater returns, interest rates are unlikely to see the light of day any time soon. This is at least true in Europe, since Mario Draghi pushed the hiking cycle back to 2020. And investors have now limited options with one being high-yielding bond purchases.<\/p>\n

In addition, the ECB\u00a0ended its QE (Quantitative Easing) programme<\/a>\u00a0only in December 2018. And the Fed\u2019s language has been tailored to\u00a0a slightly gloomier outlook<\/a>. This makes investors feel more confident with the country\u2019s bid to dish out surpluses throughout 2022. Besides, forecasts indicate that Greece\u2019s real GDP will appreciate in Q2 2019, remaining firm until the end of the year.<\/p>\n

Expectations are for Greece\u2019s public debt-to-GDP ratio to settle at a high 174% in 2019. Although hefty, this\u00a0is much lower compared to the post-Grexit vote record high of 181 percent in 2016. Also, that is a reduced figure from the 178.6 percent seen in 2018.<\/p>\n

Lessons to Learn from the 1st \u201cExiteers\u201d<\/strong><\/h2>\n

Back in 2015, PM Tsipras made far-fetched promises to denounce Greece\u2019s past bailouts and routed for the famous \u201cGrexit vote.\u201d The 2015 bailout referendum resulted in the majority of Greeks rejecting Europe\u2019s austerity measures. Despite the result, the Greek government reached an agreement for a 3-year bailout.<\/p>\n

The PM received no sympathetic hearing after defying the people\u2019s vote but gained popularity in Europe. On top of that, Tsipras resisted the temptation to imitate a number of xenophobic EU politicians. This earned him a higher level of public respect in an era of refugee crises.<\/p>\n

His 180-degree shift seems to have had a serious impact on Greece\u2019s debt restructuring, let alone the overall investment prospects in Greece.<\/p>\n

Will Greece\u2019s, or PM Tsipras\u2019s narrative repeat itself in Britain? May\u2019s \u2018charming\u2019 behavior certainly does not attract the same respect both at home and away. But with parliament\u2019s vote scheduled on the 12th of March, we are going to find out sooner rather than later.<\/p>\n

By <\/strong>Orbex<\/strong><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

By Orbex Greek Bond Sale Gains Backing from Investors The country\u2019s first bond sale since Europe\u2019s debt crisis raised \u20ac2.5 billion last week. Order books reached a ceiling of \u20ac11.8 billion. Investors began snapping up 10-year Greek debt at a 3.9 percent yield. This came after Moody\u2019s, a credit risk rating agency, lifted the country\u2019s […]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-143447","post","type-post","status-publish","format-standard","hentry","no-post-thumbnail"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/143447","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/comments?post=143447"}],"version-history":[{"count":2,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/143447\/revisions"}],"predecessor-version":[{"id":143453,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/143447\/revisions\/143453"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/media?parent=143447"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/categories?post=143447"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/tags?post=143447"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}