Greece raises 4.062 bn euros in bond sale



Published — Tuesday 13 November 2012

Last update 14 November 2012 12:33 am

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ATHENS: Greece on Tuesday raised 4.062.5 billion euros ($5.16 billion) to avert a messy default this week.
The fresh funds plug a financing gap left by a stalled EU-IMF loan which risks triggering default on a short-term debt settlement on Friday.
The Tuesday sale raised 2.762.5 billion euros in one-month treasury bills at an interest rate of 3.95 percent and a further 1.3 billion euros in three-month bills at 4.2 percent.
In the last three-month auction in October, the agency had raised 1.625 billion euros at an interest rate of 4.24 percent, while there is no recent comparable one-month offer.
But the stakes are higher now.
Greece needed the money to repay five billion euros from a prior three-month debt issue that matures on Friday.
That treasury bill had been auctioned in August to enable the country to pay state salaries and pensions in the absence of a scheduled loan payment from the European Union and the International Monetary Fund.
Worth 31.2 billion euros overall, the loan payment was supposed to have been disbursed by July but was held back owing to reform delays and protracted political uncertainty after a four-month electoral campaign in Greece.
The release of these funds, which are part of Greece’s second EU-IMF financial assistance package, is still pending.
Tuesday’s sale is nearly a billion short of the required sum for Friday’s treasury bill repayment.
But additional non-competitive bills for over 900 million euros are to be tabled by Thursday, the debt management agency said.
Greece also needs the EU-IMF payout to recapitalize its banks — which took a major blow from a state debt rollover earlier this year — and to settle outstanding debts to private suppliers that now exceed eight billion euros.
Prime Minister Antonis Samaras flew to Brussels on Tuesday for talks with President Jose Manuel Barroso and EU President Herman Van Rompuy.
“We did our part. Now we wait for Europe to make its own move,” Samaras said in off-camera comments to journalists on Monday, dailies here reported.
Eurozone finance ministers will meet on November 20 to discuss whether Athens will at last be given the urgently needed funds.
The finance ministers on Monday recognized that Greece had made “significant progress” in implementing the budgetary measures required to qualify for the next tranche of bailout money.
But according to a draft report from the EU-IMF auditing mission in Athens, satisfying a Greek request to extend its fiscal adjustment by two years could cost nearly 33 billion euros more.
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