Greece’s latest offer for a bond swap is another step towards restoring its access in capital markets and it is credit positive, Moody’s announced on Monday.
The credit rating agency, in an statement, said that the bond swap plan will not affect Greek debt and its average maturity in general terms, but it will transform low-liquidity PSI bonds into more liquid benchmark bonds, adding: “The PSI bonds created during the restructuring of the Greek debt in 2012 and their exchange is another positive step for the Greek credit rating towards Greece’s return to international capital markets”.
“The July swap reduced debt payments for 2019 and extended the average maturity of the country’s debt,” Moody’s noted, adding that the debt swap was structured to keep the average maturity of Greek debt generally unchanged. “The swap will not change Greece’s total debt,” the credit rating agency said. It added that the new bonds will have the same nominal terms as those of the state bond issues and that the swap would allow the government to create a more liquid yield curve for 25 years.
“Improvements in liquidity and the swap terms of Greek state bonds support the government’s return to international capital markets for new funding, as the country comes out of a third external support programme in August 2018,” Moody’s stressed, adding that: “We expect that the government will create a significant ‘pillow’ of reserves with the expectation of exiting the bailout programme, similar to the strategies adopted by the Irish and Portuguese governments.”
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Source: ANA-MPA
