A head of SSA syndicate at one of the leads said that the bond was not so much the result of protracted negotiations between the Greek government and its international creditors — or investors becoming more comfortable about Greece’s debt sustainability — but more the persuasive powers of finance minister Yanis Varoufakis.
“Have you seen this guy?” the syndicate head practically drooled to GlobalCapital, while twirling the cord of his phone in his fingers like a love-struck teenager.
“He’s just the most dreamy finance minister ever. How could we — or investors — say no?”
But given the low rates on offer in the SSA market, some financial engineering was required to provide a yield kicker to drive the coupon as high as 0%. The issuer has a call option embedded in the note whereby it can terminate the bond if Britain returns the Elgin marbles.
Proceeds from the bond will be used to finance a new European Central Bank headquarters in Athens.
ECB president Mario Draghi could not be reached for comment, but someone familiar with the plans said: “Mario’s very pleased about moving to sunny Athens. He says it proves once and for all that quantitative easing has some tangible benefits.”
Separately, SSA bankers are lobbying KfW to provide new incentives to make investors more enthusiastic about the cripplingly low spreads on offer from core SSAs by demanding they pay coupons on Haribo sweets rather than money.
And there was delight in the world of Islamic finance at news that the National Assembly of Wales has chosen an Islamic structure for the principality's first bond issue since the 13th century. The region is to issue a £1bn 120 year debut sukuk backed by revenues from the Swansea Bay tidal lagoon.
The swchwch, as the bond will be called in Welsh, has been heralded as big breakthrough for Islamic finance and a landmark in green financing.
For full details on these trades, please read our bond comment.
