Greece reaped €2.5 billion from sale of 10-year bonds with interest fees falling at 3.875%

Greece achieved a financial recovery feat on Tuesday, in the aftermath of a bruising, decade long financial crisis, upon selling €2.5 billion of 10-year bonds for the first time since it was entrapped into the vicious cycle of economic depression. The offer for bonds with maturity date in 2029 will yield an interest rate of 3.875%, much less than the initially pre-set target of 4.13%. Investors in total placed offers reached €11.8 billion.

In his statement, Prime Minister Alexis Tsipras argued that growing interest for Greece’s 10-year bonds represents plausible evidence that the country managed to steer clear of the road of depression. This is the second positive movement of Greece in the bond market after January 2019, when it reaped €2.5 billion in 5-year bonds. With Tuesday’s revenues, Greece will come a step closer to meeting its pre-set aspiration to raise €7 billion from international markets for the year 2019.

This is a remarkable feat for Greece given that in 2012 its 10-year bonds had an interest fee of 37%. The last sold bonds in international investors took place in March 2010 with a 6.25% interest rate. The issuance of 10-year bonds represent an important benchmark for the financial health of states, especially for these states that exited from bailout programmes.

These news were complemented by updated financial ratings issued by Moody’s Investors Service last week. Greece’s sovereign credit rating was upgraded twice, from B3 to B1 level . This upgrade is attributed to improved financial performance of Greek banks and the absence of disrupting financial developments taking place within Greece’s economic environment. Still, notwithstanding Greece’s efforts to improve its overall financial health levels, there are four credit rating scores to surmount before Moody’s issues an investment recommendation for the country’s bonds.

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