June 21, 2017 / 9:34 AM / a year ago

Greece will return to bond market soon, Tsipras predicts

ATHENS (Reuters) - Greece should be in a position to return to bond markets very soon, Prime Minister Alexis Tsipras said on Wednesday, predicting that yields on the country’s bonds would continue to fall after it secured a credit lifeline last week.

Greek Prime Minister Alexis Tsipras waits to welcome his Turkish counterpart Binali Yildirim at the Maximos Mansion in Athens, Greece June 19, 2017. REUTERS/Costas Baltas

Euro zone governments agreed the 8.5 billion euro (7.49 billion pounds) payout on Thursday and sketched new detail on possible debt relief as the International Monetary Fund offered to contribute to the country’s bailout after two years of hesitation.

Yields on Greece’s 10-year government bond GR10YT=TWEB have fallen almost 30 basis points to around 5.58 percent since then, their lowest level since September 2014.

“I expect that in the coming period the downward path of yields will continue so that very soon we will have the ability to make our first test-exit to the markets on good terms,” Tsipras told a cabinet meeting.

He said Thursday’s meeting of euro zone finance ministers had reached agreement to support Greece’s return to markets so that it would be able to refinance its debt after its bailout - the third since 2010 - ended.

“There was a specific commitment to conclude the (bailout) programme by August 2018 and support Greece to return to markets,” he said.

He said the decline in the 10-year yield to about 5.5 percent was already a “safe criterion of trust” for those who would soon be called on to invest in Greece’s sovereign debt.

Athens had been hoping its official lenders would last week reach a deal on longer-term debt relief and that the European Central Bank would include it in its bond-buying programme.

“Inclusion in (the ECB’s) quantitative easing is not a necessary precondition for a test bond issue in the market,”

Deputy Finance Minister George Chouliarakis told Reuters, without specifying when Greece would proceed.

“The required condition is trust and credibility in the markets. Surely, an inclusion in QE would further help the effort (to return to markets),” he said.

Greece’s last venture onto international bond markets was with two issues in 2014, a year before it plunged into crisis in a tense standoff between lenders and its new left-wing government, elected on a campaign to end bailout-induced austerity.

Reporting by George Georgiopoulos and Lefteris Papadimas; editing by John Stonestreet and Pritha Sarkar

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