Greece will launch a new bond linked to eurozone inflation, making it the second European government to tap this sector pioneered by France.
Book-building for the issue, which is expected to total about €700m, started on Monday, March 17th said bankers at JP Morgan co-lead manager of the deal.
The index-linked market has recently outperformed conventional government bonds, even though these have also rallied strongly.
“A lot of people used to buy equities for protection against inflation but for the past couple of years inflatio-linked bonds have proved a better investment in this respect”, said Patrick van der Wansem, sovereign originator at JP Morgan.
Greece’s new bond will have a 22-year maturity and is likely to be priced for a real yield of 2.60-2.65 per cent, Mr van der Wansem said. This would compare with roughly 2.40 per cent for France’s 30-year bonds linked to eurozone CPI, excluding tobacco.
The other underwriters for Greece’s new bonds are UBS Warburg and National Bank of Greece.
(From Financial Times, 13/03/03)