Bonds to woo big investors

The door is now wide open for the entry of quality and long-term investors, who manage trillions of dollars, into the Greek bonds market: Bloomberg Index Services, a global provider of government bond indices, has become the first to include Greek bonds among the elite of the debt markets, announcing that 17 Greek bonds worth 73 billion euros are to be included in its index series as of January.

In the coming days, similar announcements are expected from other providers, such as S&P Dow Jones (iBoxx indices), the FTSE and JPMorgan Chase.

It was the upgrade of Greece by Fitch that led to this development, as most international bond indices require an investment grade rating from at least two of the “big three” rating agencies – S&P, Moody’s and Fitch – or an average investment grade rating. Of course, there are also indexes with stricter criteria, which require a rating in the “A-” category from S&P and Moody’s, which for Greece is still several years away.

In particular, as the Bloomberg Index Services announcement states, with the recent upgrade of the Greek public debt by Fitch to “BBB-,” which followed a corresponding upgrade by S&P in October to “BBB-,” the debt of the Greek government is now considered investment grade, according to the Bloomberg indices evaluation methodology.

It therefore becomes eligible for its leading indexes, namely: Bloomberg Series-L, Euro Treasury, Euro Aggregate, Global Treasury and Global Aggregate Indices, Series-B and Series-E, as well as the related subindices and adjusted indices.

Due to the low liquidity that tends to exist in the international bond market at the end of the year, Greek bonds will enter the Bloomberg index universe at the beginning of January 2024, while they will contribute to the returns of the specific indexes from February 1, 2024.

The 17 Greek bonds, which will be available to the public of large investors, have maturities from two to 30 years, with a total current market value of €73.11 billion.