ATHENS, Greece (AP) — Greece raised 3 billion euros ($3.4 billion) in a 10-year bond auction Wednesday, which supplements tax revenue to finance everything from free COVID-19 tests for schoolchildren to fighter jets following its yearslong economic bailout program.
Finance Minister Christos Staikouras said the country’s first bond issue of the year was a success as it attracted “high demand and a high quality of investors.”
He said the yield was around 1.8%, compared with 0.9% in June, a big increase that he attributed to an international rise in government borrowing expenses.
Greece has financed itself through bond issues since the end of its 2010-2018 bailout program, forced after it lost market access following a string of credit rating downgrades triggered by excessive budget deficits and questionable data reporting.
Staikouras said in a statement that the cost of Wednesday’s issue was “satisfactory” given global trends.
“There’s an international increase in state bond yields due to high uncertainty caused by the continued (pandemic) crisis, (and) the rise in inflation,” he said.
Greece is planning to raise more than 10 billion euros from bond issues this year.
Despite the country’s post-bailout recovery, Greek bonds are still rated as below investment grade, which restricts many key investors from buying them. The government hopes to have secured the necessary upgrades from major ratings agencies by the end of this year or early 2023.
Fitch ratings agency on Friday revised Greece’s outlook to positive from stable, although it kept the country’s rating two notches below investment grade.
An upgrade in outlook is usually, but not always, followed by a credit upgrade within 12-18 months.