Greece will issue a diaspora bond aimed at Greek investors all over the world "within the next few months" in an effort to return to long term bond markets in 2011, Finance Minister George Papaconstantinou said Sunday.
"We will mainly address Greeks in Europe, the US, Australia, etc, while the interest will be lower than current market rates," Papaconstantinou told the Sunday edition of Eleftherotypia newspaper. According to the Kathimerini daily, the Greek government seeks to issue a diaspora bond "of between three and 10 years" or "possibly a one-year bond" in order to send a message to the markets that Greece has access to cheap finance.
Greece on Tuesday raised 650 million euros ($866 million) in a sale of three-month treasury bills at a stable yield of 4.1 percent despite a recent downgrade in its credit rating to junk status by the Fitch ratings agency. Eighty percent of the amount was sold to foreign investors, according to the Public Debt Management Agency (PDMA). Greece last year secured a three-year, 110-billion-euro ($149 billion) loan from the EU and the International Monetary Fund, most of it from the EU.
It is currently in talks with Brussels to extend repayment on this loan, or reduce its interest rate, though it has repeatedly denied any restructuring of its other debts.
"Sincerely, Greece can and will avoid it," Papaconstantinou told Eleftherotypia, referring to restructuring Greece's debt. The political and economic cost of debt restructuring would outweigh the short-term cost, the Bank of Greece governor warned on Sunday.
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