Greece gathers momentum for comeback


By Robert HoggLONDON, July 17 (IFR) - Greece is the talk of the town as
bankers wait to see if the sovereign makes a much-anticipated
return to the markets.
    Any deal would break a three-year impasse during which
Athens has been shut out of the market. Greece is said to be
looking at selling €2bn-€4bn of five-year bonds, although it
could be forced to go as short as two years.
    "It sounds like there are certain dealers speaking with more
definition than others," said a banker who had heard chatter of
a Monday trade but thought it unlikely that any deal would be on
screens today.
    One investor said he would steer clear of any issuance from
the sovereign (Caa2/B-/CCC), highlighting some of the hurdles
Greece will have to overcome in persuading accounts to take on
the paper.
    Relief on its €326bn debt pile remains elusive, and the
country's sovereign bonds are still not eligible to be bought
under the ECB's quantitative easing programme.
    "Given its rating and off-benchmark nature, it's
non-eligible for most of our mandates," said the investor. "It
is not a focus in our developed markets activity."
    Greece has modest redemptions due on Monday, with €1.5bn
maturing. A new issue will see the sovereign jostling for space
in the market alongside the European Financial Stability
    A second banker expects the two issuers to coordinate their
    "EFSF are looking, and so Greece will probably want to tie
it out between them and the EFSF," he said.
    The expectation is that the EFSF will opt for another
dual-tranche transaction, following a €6bn two-legged deal
earlier in July that raised money across a €2.5bn Jul 2025 and
€3.5bn Jul 2048.
    The window for both issuers could be squeezed by Thursday's
ECB meeting.
    European government bond yields are lower on the back of
some follow-through buying after...

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