Greece

Less than two weeks after agreeing to a programme of debt relief for Greece, the European Stability Mechanism (ESM) has suspended the measures, blaming proposed pension largesse.

The European Stability Mechanism and European Financial Stability Facility’s joint funding requirement for 2017 has been driven up €7bn because of new debt relief measures for Greece.

It doesn’t take a genius to work out that Greece needs real debt relief if it is ever to return to stability, nor that European leaders are afraid of providing it ahead of a busy election calendar for next year.

The Greek government’s plan to return to the bond market next year is unlikely to garner much interest from investors unless it pays an inflated price, despite a series of short term debt relief measures agreed this week, said public sector bankers.

The busy equity block trade action in Europe since the US election has continued into its third week, though market participants are beginning to brace for the outcome of the Italian referendum on Sunday.

Maturing deals issued by Washington Mutual and National Bank of Greece show covered bonds doing precisely what they're supposed to — redeem in full and on time.

Hellenic Petroleum on Thursday opened books for a new euro bond to redeem its 8% 2017s, with coupon guidance already some 200bp tighter than the old notes.

The European Bank for Reconstruction and Development (EBRD) has begun flexing its muscles in Greece’s private sector after the country was approved as an EBRD recipient country last year by arranging a partly syndicated loan for Hellenic Telecommunications Organisation (OTE).

A group of lenders are working on a long term loan for the privatisation of 14 Greek airports. Greece’s Alpha Bank is the advisor for the financing, which includes a €820m clip, according to a banker close to the deal.

Piraeus Bank has become the third of the four largest Greek banks to update its covered bond programme in what is likely to be a prelude to issuance.

Greek government bonds were the strongest performer in the eurozone on Thursday, with yields plunging after the European Central Bank reinstated a waiver that allows the use of the paper as collateral in monetary policy operations.

The European Central Bank has said it will allow Greek banks to participate in its regular refinancing operations, potentially slashing their funding costs.