ATHENS, Greece (AP) — Greece is poised to tap international bond markets for the first time in three years in a move the government hopes will signal the country is ready to emerge from its bailout era.
In an announcement Monday, the country said it had hired six global banks to manage Tuesday’s five-year bond issue. Settlement will be Aug. 1.
Greece lost market access in 2010 as the country descended into a financial crisis that saw it receive three international bailouts to keep it afloat in return for wide-ranging reforms of its economy. The county has only tapped markets once in that time, issuing a five-year bond in 2014.
Tuesday’s bond issue is part of a “switch and tender offer,” whereby holders of the previous bond which matures in 2019 are asked to switch their bonds for cash.
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It will be the first bond issue for the left wing-led coalition government of Alexis Tsipras, who came to power in early elections in 2015 on a mandate to repeal bailout-imposed austerity measures.
The rocky start of Tsipras’ premiership saw Greece come to the brink of crashing out of Europe’s joint currency, before the government changed tack and imposed further creditor-required belt-tightening measures. In July 2015, he signed up to the country’s third international bailout, which is due to end next year.
Regaining market access has long been a government goal, as it seeks to cement improvements to the country’s economy. Though the country’s stock of debt remains very high at around 175 percent of annual GDP, the annual budget position is much improved and most forecasters predict an uptick in growth.
On Friday, ratings agency Standard & Poor’s raised its outlook for Greece from “stable” to “positive,” encouraged by a recent round of cost-cutting reforms and an expected return to growth this year, although it did not upgrade its credit rating on the country, leaving it at the junk status of B-.
S&P said the revision reflected an expectation that Greece’s debts and debt servicing costs will “gradually decline” on the back of the economic recovery, the fiscal measures planned through 2020 and the commitment of bailout lenders to provide additional debt relief.