The yield on Greece’s comeback April 2019 bond fell around 220bp to 12.79% on Tuesday, while its July 2017 bond’s yield dropped by 327bp to 15.98%.
The falls came after the Financial Times published an interview with Greek finance minister Yanis Varoufakis on Monday evening, where he said that rather than seeking to write off Greek debt held by public sector creditors, his party Syriza could try to swap that paper for bonds linked to GDP growth and perpetual bonds.
Syriza’s previously bullish position on winning haircuts on its debt had made investors nervous, but many of those concerns vanished on Tuesday morning as Ireland opened books on a February 2045 bond.
“It’s true that some accounts were concerned,” said an SSA syndicate official at one of Ireland’s leads, which were Barclays, Citi, Crédit Agricole, Danske Bank, Davy and Royal Bank of Scotland.
“But they came nonetheless because they realised Ireland is a different animal and it also looks like Greece will be sorted out. The political will to solve problems has been shown time and again. Investors are getting more comfortable.”
The leads priced a €4bn February 2045 bond for Ireland at 90bp over mid-swaps, at the tight end of guidance of 94bp area. That was well inside initial price thoughts of high 90s, which were circulated on Tuesday morning and attracted indications of interest of over €6.5bn.
Investor statistics were not available as GlobalCapital went to press, but the final book was over €11.2bn, including €1.15bn of lead interest.
Auction return
Cyprus held its first auction — of either bonds or bills — since 2012 on Tuesday. The sovereign, which like Greece is still in a bail-out package, sold €125m of 13 week bills at an average yield of 2.96%. Investors placed €208.9m of offers.
The sovereign’s last 13 week bill auction in May 2012 sold €150m of paper at an average yield of 4.38%.
