Athens: Greece easily sold a total of 1.2 billion euros (Dh5.98 billion) of six-month and one-year T-bills (treasury bills) yesterday, passing its first borrowing test since details of an EU/IMF safety net were announced at the weekend.
The debt agency accepted an additional 360 million euros in non-competitive bids, bringing the total proceeds to 1.56 billion euros.
The successful sale may encourage Greece to continue trying to go it alone in refunding its debt instead of applying for emergency loans, although borrowing remains quite costly, adding to budget strains.
The auction by the country's Public Debt Management Agency (PDMA) produced a uniform yield of 4.85 per cent for the 52-week T-bill, up from 2.20 per cent in a previous January 12 auction. The 26-week yield came to 4.55 per cent, up from 1.38 per cent in the previous auction.
"The issuance was very successful. Greece raised more funds than originally announced and the issue was oversubscribed several times," Ioannis Sokos, a bond analyst at BNP Paribas, said.
While the yield on one-year bills was lower than the 6-7 per cent Greece would have paid last week, it is still quite costly for the debt-laden country, indicating the market still sees risks over a 12-month horizon.
The T-bill issue was smoothly absorbed. The bid-to-cover ratio was 6.5 versus 3.05 in the previous January auction.
"It's a positive endorsement of the bailout measures that went out over the week-end," Ben May of Capital Economics said. "But clearly the yields are still very high and longer term bond yields remain very high."
Including Tuesday's auction, Greece has borrowed more than 25.5 billion euros so far this year, around 10 per cent of its GDP, to cover redemptions and deficits. Its projected total borrowing need this year is 53.2 billion.
