On Wednesday, the Public Debt Management Agency (PDMA) conducted an auction for the reissuance of Greek bonds with a 3.875% interest rate, set to mature on June 15, 2028. The total value of these bonds amounted to 200 million euros.
The auction was carried out through the Primary Dealers, with total bids reaching 623 million euros. The settlement date for this auction is scheduled for Wednesday, February 21, 2024.
The move is expected to yield significant savings for the Public, with an estimated 850 million euros saved over the course of the decade, solely from the interest payments on the bonds issued last month.
Breaking down the figures, the annual benefit amounts to 8.5 million euros per billion of debt. With the Public Debt Program for 2024 standing at 10 billion euros, this translates to an annual saving of 85 million euros.
Looking ahead, the benefits of this strategy are projected to extend over the long term. With an extrapolation of the savings over the 20-year period, which aligns with the average duration of Greek debt, the total benefit is estimated at 60 billion euros for the entire public debt.
Furthermore, PDMA’s analysis indicates a positive trajectory for Greece’s debt sustainability, with levels projected to reach 44% of GDP by 2060 and 32% of GDP by 2070. These projections take into consideration the higher borrowing rates compared to the recent decade bond and do not include the early repayments of costly loans scheduled for the near future, which are expected to further enhance the debt profile.
However, it is crucial to note that these projections are contingent upon the current global conditions remaining relatively stable, without any significant geopolitical disruptions.
