Πηγή: WSJ
By Jessica Mead and Karen Hage
August 14 2012
-- Greece sells just over EUR4 billion in 13-week treasury bills, its largest debt sale in two years
-- Most of the funds raised will go to repay EUR3.1 billion in bonds held by the ECB due Aug.20
Greece completed its largest debt sale in two years Tuesday, ensuring that it will have the money to repay bonds held by the European Central Bank next week.
The Greek Public Debt Management Agency said it sold 4.063 billion euros ($5 billion) of 13-week treasury bills at an auction, which included a 30% non-competitive tranche. The uniform yield was 4.43%.
Most of the funds will go to repay EUR3.1 billion in bonds held by the European Central Bank that mature August 20. That will ensure that the country avoids a default that would make it impossible for Greek banks to carry on borrowing from the ECB, on which they currently depend for their survival.
The remaining funds will go to the general budget and should ensure that Greece has enough money through the end of September, when it hopes to receive the next instalment of financial aid from its other official creditors, the euro zone and the International Monetary Fund.
The total number of bids amounted to EUR4.248 billion, putting the bid-to-cover ratio at 1.36. The apparent success of the auction mainly reflected Greek banks borrowing from the Eurosystem at one window to repay it at another. The banks have used Emergency Liquidity Assistance from the Bank of Greece to buy the bills, and are expected to pledge them immediately at the Bank of Greece as collateral for more such loans.
ELA is a credit line provided by the ECB to the Greek central bank, and has been used particularly heavily by Greek banks since the ECB stopped accepting the country's sovereign bonds as collateral at its main monetary policy operations last month.
ELA requires the special consent of the ECB's governing council and is offered at a penalty rate well above the ECB's official interest rates. The Greek banking system was refinancing 106 billion euros, over one-sixth of its total assets, with such loans at the end of July.
Interest-rate strategists remained skeptical that Tuesday's auction would do more than buy some much-needed time.
"The fact that Greece issued EUR4 billion gives them a bit of extra cash. But it needs a lot more than 90-day bills. This is simply an extension of the life support," said Richard Kelly, an interest-rate strategist at TD Securities in London.
Others also worried that the auction did not reduce the risk posed by Greece to the euro zone as a whole in any durable way.
"What this operation does, however, is temporarily shift the Greek risk away from the whole euro area to the Greek central bank. Once the bail-out funds have been paid and the T-Bills redeemed, of course, the risk is back at the euro-area nations," RBC Capital Markets analysts said in a note to clients before the auction.
Starved of alternative financing options after its euro-zone partners refused to provide a bridging loan, Greece had no alternative but to step up its T-bill issuance to meet funding needs.
The bumper size of Tuesday's auction dwarfs issues of between EUR625 million and EUR1.25 billion so far this year and follows a 26-week Treasury bill sale last week that raised EUR1 billion.
The government also plans to tap more than EUR1 billion from its bank recapitalization fund (Hellenic Financial Stability Fund) to avoid running out of money, a Greek government official said.
"It will be very tight, but we will be able to meet basic obligations like salaries and pensions," the official said. "Money owed to the private sector, such as VAT refunds, will be withheld until the next loan payment is in."
He added that both the ECB and the euro zone had approved the increased T-bill issuance and the temporary diversion of funds from the HFSF.
-- Most of the funds raised will go to repay EUR3.1 billion in bonds held by the ECB due Aug.20
Greece completed its largest debt sale in two years Tuesday, ensuring that it will have the money to repay bonds held by the European Central Bank next week.
The Greek Public Debt Management Agency said it sold 4.063 billion euros ($5 billion) of 13-week treasury bills at an auction, which included a 30% non-competitive tranche. The uniform yield was 4.43%.
Most of the funds will go to repay EUR3.1 billion in bonds held by the European Central Bank that mature August 20. That will ensure that the country avoids a default that would make it impossible for Greek banks to carry on borrowing from the ECB, on which they currently depend for their survival.
The remaining funds will go to the general budget and should ensure that Greece has enough money through the end of September, when it hopes to receive the next instalment of financial aid from its other official creditors, the euro zone and the International Monetary Fund.
The total number of bids amounted to EUR4.248 billion, putting the bid-to-cover ratio at 1.36. The apparent success of the auction mainly reflected Greek banks borrowing from the Eurosystem at one window to repay it at another. The banks have used Emergency Liquidity Assistance from the Bank of Greece to buy the bills, and are expected to pledge them immediately at the Bank of Greece as collateral for more such loans.
ELA is a credit line provided by the ECB to the Greek central bank, and has been used particularly heavily by Greek banks since the ECB stopped accepting the country's sovereign bonds as collateral at its main monetary policy operations last month.
ELA requires the special consent of the ECB's governing council and is offered at a penalty rate well above the ECB's official interest rates. The Greek banking system was refinancing 106 billion euros, over one-sixth of its total assets, with such loans at the end of July.
Interest-rate strategists remained skeptical that Tuesday's auction would do more than buy some much-needed time.
"The fact that Greece issued EUR4 billion gives them a bit of extra cash. But it needs a lot more than 90-day bills. This is simply an extension of the life support," said Richard Kelly, an interest-rate strategist at TD Securities in London.
Others also worried that the auction did not reduce the risk posed by Greece to the euro zone as a whole in any durable way.
"What this operation does, however, is temporarily shift the Greek risk away from the whole euro area to the Greek central bank. Once the bail-out funds have been paid and the T-Bills redeemed, of course, the risk is back at the euro-area nations," RBC Capital Markets analysts said in a note to clients before the auction.
Starved of alternative financing options after its euro-zone partners refused to provide a bridging loan, Greece had no alternative but to step up its T-bill issuance to meet funding needs.
The bumper size of Tuesday's auction dwarfs issues of between EUR625 million and EUR1.25 billion so far this year and follows a 26-week Treasury bill sale last week that raised EUR1 billion.
The government also plans to tap more than EUR1 billion from its bank recapitalization fund (Hellenic Financial Stability Fund) to avoid running out of money, a Greek government official said.
"It will be very tight, but we will be able to meet basic obligations like salaries and pensions," the official said. "Money owed to the private sector, such as VAT refunds, will be withheld until the next loan payment is in."
He added that both the ECB and the euro zone had approved the increased T-bill issuance and the temporary diversion of funds from the HFSF.
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