Between 70% and 80% of the issue activity will be covered through two new syndicated issues – with a new 10-year note being certain and expected, most likely, at the beginning of the year – and the rest through planned reissues of existing securities, amounting to some €2 billion.
Greece will tap the markets for up to 8 billion euros next year, much less than its borrowing needs, thanks to the funds that will continue to flow into the economy and the targeted use of high cash reserves to reduce debt.
Between 70% and 80% of the issue activity will be covered through two new syndicated issues – with a new 10-year note being certain and expected, most likely, at the beginning of the year – and the rest through planned reissues of existing securities, amounting to some €2 billion.
According to the strategy published by the Public Debt Management Agency (PDMA), Greece’s borrowing needs for 2025 are set at €15.283 billion, of which €5.54 billion concerns amortizations, €4.75 billion interest payments, €5.29 billion in early repayments the state will make – such as further early installment payments of bilateral GLF loans – and €5.496 billion concern other liabilities, while the primary surplus will be €5.973 billion.
The gap of €7.283 billion (beyond the €8 billion from the markets) will be covered by part of the inflows from the Recovery Fund, as well as by other EU capital inflows, estimated at €3.027 billion, by proceeds from equity and investment participations of €564 million and by the use of €3.692 billion from cash reserves, while debt is expected to increase by approximately €197 million.
Therefore cash reserves at the end of 2025 will move close to €28 billion or even lower, from about €33 billion at the end of 2024, which comfortably covers the gross financing needs of the next three years and will continue to provide a significant safety cushion against potential refinancing and interest rate risks in the medium term.
Given the outperformance of the Greek state budget, the favorable structure of the Greek public debt portfolio, the very low amortization and annual interest payments, the zero exposure to foreign exchange and interest rate risk etc, the most difficult part of PDMA’s work for the years to come is to find space for issuance activity, as Dimitris Tsakonas, the general director of PDMA, has said.