Greece

Greece is not likely to join the European Central Bank’s Public Sector Purchase Programme after it exits its bailout programme, according to a senior rates strategist.

S&P Global Ratings has revised Greece’s outlook from stable to positive, with an upgrade on the horizon if the sovereign meets certain criteria.

National Bank of Greece (NBG) won an investment grade covered bond rating this week, showing the way for European Central Bank (ECB) repo eligibility to other Greek banks. Along with a more stable fiscal and political backdrop and an imminent exit from its bail-out programme, Greek covered bonds have a good chance of outperforming Italian versions.

Standard & Poor’s assigned an investment grade rating to the National Bank of Greece’s (NBG) conditional pass through (CPT) covered bond programme on July 6.

Market sources said rising political uncertainty in the eurozone was to blame for the second deal pulled from the European high yield bond market so far in May, as Greek issuer Pangaea cancelled its high yield roadshow on Thursday.

Covered bond investors would be better off ensuring a full recovery and maturity extension than accepting a partial recovery and claiming the remainder from the insolvency estate of the issuer, according to delegates who voted at the IMN conference in London on Tuesday.

Piraeus Bank's Project Amoeba is one of the first secured Greek NPL portfolios to hit the market, and will serve as a crucial benchmark for pricing on the remaining €100bn of NPLs to come. Meanwhile, the other major banks are selling unsecured books.

The State of North Rhine-Westphalia showed that the euro long end is open for core SSAs despite wider market volatility on Thursday, but there was a more testing time for Greece in secondary.

Greece’s return to capital markets last week drew nothing but praise on the day, but its subsequent performance in the secondary market has left something to be desired, said bankers.

Rating: Caa2/B/B-

Despite heavy volatility in the equity markets, in fixed income, public sector bond issuers had an excellent week. A cool €10bn hit the market in tenors from five to 15 years and from all parts of the spectrum within the asset class. Lewis McLellan reports.

After being sidelined by volatility in the equity market this week, Greece made it to market on Thursday with a €3bn seven year.