Banks discern many benefits in Greece’s new bond issue

Greece’s return to the bond markets on Tuesday will have a particularly positive impact on the economy and the local credit system, according to senior bank officials.

Domestic lenders expect to absorb some 1 billion euros from Greece’s first bond issue since 2014. The banks will swap paper maturing in 2019 for the new issue, a move set to fetch certain capital gains given the difference in interest rates and the maturity period. Besides the swap, local banks also intend to proceed with a slight increase in their Greek bond holdings.

Bank officials told Kathimerini that the country’s return to the markets constitutes a major step toward restoring normalcy.

If the issue proves successful it will give the economy a decisive boost in terms of confidence, triggering a series of positive developments, from the gradual return of bank deposits and strengthening interbank transactions, to a general improvement in the country’s economic and investment climate.

Success, they stress, will depend on the participation of foreign investors.