On Tuesday, barring unforeseen circumstances and if conditions permit, the Greek government will make its first market foray of 2025, with a new 10-year bond and with the timing being solely due to one factor: Donald Trump.
The return of the wealthy entrepreneur to the White House next Monday marks the beginning of a fairly uncertain period with multiple effects on markets and economies, mainly on the tariff policy front, so Greece’s Public Debt Management Agency prefers to cover a significant part of the country’s financing needs for the year before the “Trump factor” unfolds.
The new syndicated issue, which BofA Securities, Deutsche Bank, Goldman Sachs, Morgan Stanley, Societe Generale and National Bank have undertaken to run, is expected to raise 2.5-3 billion euros, depending of course on demand, thereby covering approximately one third of the 2025 lending program.
In this context, the Hellenic Securities and Exchange Commission announced that the bond auction (reopening) scheduled for Wednesday will not take place. The PDMA aims to raise up to €8 billion this year, through two new syndicated issues (approximately €6 billion) as well as planned reissues of existing securities (about €2 billion).
Regarding pricing, the new 10-year note will certainly have a higher yield than the 10-year paper issued in early 2024 (3.478%), given that the bond market is also coming from a sell-off in recent days due to the limitation of expectations for Fed interest rate cuts. After all, on Monday the 10-year yield was hovering around 3.47%, while the spread with the German 10-year bond was 88 basis points.
Demand is expected to be strong, with investment interest in government bonds in general being intense in January this year, as was also seen in the issuances of the Greek state’s “competitors” in previous days, namely Italy, Portugal and Belgium.
In addition, Greece also has the advantage of a very positive macroeconomic story, with its growth expected to exceed that of the eurozone this year.