ATHENS, Greece (AP) — Greece successfully launched its first 10-year bond auction since 2010 on Tuesday, as it seeks to gradually regain the confidence of international investors and wean itself off bailout funds.
Prime Minister Alexis Tsipras said the issue attracted strong interest from investors, showing that the country has left behind the bitter crisis era when it was shunned by markets and flirting with bankruptcy.
“Bids are at an admirable level, and this is an indication of hope,” Tsipras said. “It’s a sign that we are turning a new page and exiting the crisis era.”
The Public Debt Management Agency said Greece raised 2.5 billion euros with a yield of 3.9 percent in the heavily oversubscribed auction that attracted bids worth 11.8 billion euros.
The debt issue came at an opportune moment for Greece, as its yields hover around their lowest in more than a decade after Moody’s ratings agency raised the country’s credit rating by two notches. While still well below investment grade, its B1 classification marks a vast improvement for a country that was in default at the worst of the crisis.
The results of the bond issue were expected to be announced later Tuesday.
It was Greece’s second foray into capital market financing since the end of its third, and last, bailout program in August. The government raised 2.5 billion euros ($2.85 billion) through an oversubscribed five-year bond in January.
The country was priced out of capital markets after revealing it had for years misreported public debt figures and signed its first bailout deal in mid-2010. In exchange for the rescue loans, successive governments were forced to make deep income cuts and tax hikes, while radically reforming the economy.
The austerity deepened an economic recession and caused a sharp fall in living standards — with the average incomes dropping by a third and unemployment spiking to a postwar record of 28 percent. It’s now 19 percent.
Tsipras was elected in 2015 on a defiantly anti-austerity platform but was soon obliged to reverse course and sign up to the third bailout — and even more austerity.
His government implemented reforms it had previously opposed and is seen as committed to maintaining course despite a slackening of pace in recent months and a slew of voter-friendly measures as parliamentary elections approach this autumn.
The pro-reform, conservative New Democracy party is leading in all opinion polls ahead of the election.
Greece’s European creditors are due next week to review the country’s progress before deciding whether to release more than 700 million euros in pledged funds.
The Greek debt management agency has said it plans to issue 5-7 billion euros in benchmark bonds this year.
Copyright © 2019 The Associated Press. All rights reserved. This material may not be published, broadcast, written or redistributed.