Greece eyes bond swap as bailout exit looms
Greece is looking into the option of swapping small bond issues for new ones as it prepares to end the international bailout program next year according to various government sources, with the aim of returning to normal financing operations.
According to the sources, the government is considering a swap that would consolidate the secondary market into a few benchmark issues, replacing 20 separate bonds with a face value of around €32bn. “We are planning to proceed with some debt management actions to improve liquidity and tradeability,” an official told Reuters.
Greece's borrowing costs have fallen sharply this year back to pre-crisis levels, as investors see the prospect further bailouts diminishing as well as signs of economic improvement. Despite the welcome progress, liquidity remains an issue. The government hopes an expanded financial buffer will boost the possibility of a clean bailout exit from the program.