The Hellenic Republic this week pushed outstandings on its Eu5bn EuroCP facility through the $4bn equivalent mark, concluding what has been a lightning start for the borrower in the market.
Greece signed the facility through Credit Suisse First Boston in July 2003 and launched two Eu25m notes off the programme towards year end. However, it was only on January 15 that the borrower launched the shelf in earnest.
The sovereign, rated P1/A1, has since issued 13 euro denominated trades, 10 of which are outstanding.
Greece has issued in tenors ranging from five days out to three weeks, tapping the very short end of the EuroCP market. However, that strategy was a product of the borrower's funding needs rather than any market trend.
The sovereign yesterday (Thursday) also made a Eu1.75bn tap to its debut Eu1.25bn euro zone inflation linked bond launched last March.
"We used the CP programme as a bridge financing to cover our cash needs," said Christoforos Sardelis, director general of the Greek public debt agency (PDMA) in Athens. "However, we will now have the inflows from the deal launched today as well as the 10 year benchmark from the beginning of January.
"Today's transaction went very well. We increased the size to Eu1.75bn to satisfy demand and the paper went to top quality accounts, so we are very pleased."
Lead managers on the bond were BNP Paribas, Emporiki Bank, Goldman Sachs and Morgan Stanley.
However, while mainstream bond investors were pleased to see Greece tap the markets yesterday, commercial paper investors will not have been so happy as the sovereign plans to stop issuing commercial paper in the short term.
"I would envisage outstandings on the programme falling from the $4bn mark to around $1bn over the next few weeks," said Sardelis.
Dealers said that paper traded this week at around 2bp through Euribor and that a wide variety of investors came in, including central banks and money market funds.
"The borrower has had a good run of things," said one dealer. "But the real news is that a new borrower can come to the market and generate that amount of liquidity in such a short space of time."
However, while volumes off the programme have been impressive, the short tenor of the paper offered meant that there was little credit risk and that investors were able to place their money almost as a short term bank deposit.
Dealers agreed that pricing on the paper would widen considerably if the borrower were to lengthen maturities.
The sovereign's programme has one of the largest dealer panels in the EuroCP market.
Alpha Bank, BNP Paribas, Citigroup, Credit Suisse First Boston, Deutsche Bank, EFG Eurobank Ergasias, Emporiki Bank, Goldman Sachs, HSBC, ING Bank, JP Morgan, Lehman Brothers, Merrill Lynch, Morgan Stanley, National Bank of Greece, Piraeus Bank, Sanpaolo IMI and UBS are all included.
However, while Sardelis said he was happy with investor demand for the republic's paper, he had reservations about the EuroCP market as a whole.
"Liquidity in the market has been a bit thin," he said. "When we started out we had the impression that the market would be more liquid than it is, so in the future we'll be more cautious and won't push volumes as high as they are now."
