Greece exploring first new bond issue since 2014

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Greece is planning to issue its first sovereign bonds since 2014 this summer if it can secure relief on its massive debt pile, according to reports.

The Greek government could offer a five-year bond as early as July, Reuters reported, citing government officials.

Greece’s creditors, including the European Central Bank and the International Monetary Fund (IMF) recently agreed to release another slice of money from Greece’s current €86bn (£73bn) bailout, averting a potential default when separate bond payments become due in July.

The latest bailout came in exchange for further austerity measures for the beleaguered economy, which returned to recession in the first quarter of this year.

Despite the contracting economy, Greek borrowing costs have fallen to levels not seen since the last time it issued new debt in what was planned as a triumphant return to international bond markets.

The move to issue new bonds will depend on a deal on relieving Greece of some of its debt burden, according to Reuters’ sources. EU bosses meet on Monday to discuss the bailout once more.

Greece’s government is currently labouring under a debt load that is 179 per cent of its GDP, leading investors on bond markets to look warily at attempts by the country to borrow more.

That sentiment is shared by the IMF, which has been pushing for the other creditors involved in Greece’s bailout to lessen the burden, either by writing off some of the debt or by lengthening the period of time the country can take to repay it.