Announcements

REOPENING OF 15 YEAR GGB, DUE 2035

PRESS RELEASE – 21st October 2020

The Hellenic Republic

B1/BB-/BB/BBL (Moody’s stb./S&P stb./Fitch stb./DBRS stb.)

EUR 2bn Tap of GGB 1.875% Feb-2035

 

Summary Terms

 

Format:

State Obligation (in dematerialised book entry form), RegS Cat 1, 144A eligible, CACs

Type:

Senior unsecured, ECB repo eligible, qualify for Pandemic Emergency Purchase Programme (PEPP)

Original Size:

€2.5bn

Tap Size:

€2.0bn

Maturity:

4 February 2035

Settlement:

29 October 2020 (T+6)

Coupon:               

1.875%, Fixed, Annual ACT/ACT

First Coupon Date:

4 February 2021

Interest Commencement Date:

4 February 2020

Re-offer:

109.460% / 1.152% / MS+125bp

Listing:                  

Athens, regulated market

Law:

English Law

Denominations:

€1k +€1k

Docs:

Exempt from prospectus requirements in Greece. Greek public Debt tax regime. Events of default. Tax gross up

Bookrunners:

BNP Paribas, Commerzbank, Goldman Sachs International Bank (GSIB) (B&D), HSBC, J.P. Morgan

 

 

 

 

Transaction Highlights

  • On Wednesday, 21st October, the Hellenic Republic, rated B1/BB-/BB/BBL (Moody’s stb./S&P stb./Fitch stb./DBRS stb.), priced a €2.0bn tap of Greece Government Bond (GGB) due 4th February 2035. The re-opening line was priced at a re-offer yield of 1.152%, implying re-offer price of 109.460%.BNP Paribas, Commerzbank, Goldman Sachs International Bank (GSIB), HSBC, J.P. Morgan acted as Joint Bookrunners on the deal.
  • Macro-financial measures, including Pandemic Emergency Purchase Program (PEPP), deployed by the ECB for which the Hellenic Republic is eligible, further amplified demand for the offering.
  • It is the fifth market approach by the Hellenic Republic in 2020 after € 2.5bn tap issuance on September 2nd, when the Republic tapped its Jun-2030 bond at a re-offer yield of 1.187%, issued earlier in the year. The Republic’s year-to-date international capital markets borrowing has reached €12bn, including 21st October tap transaction.
  • With the help of international debt capital markets, the Hellenic Republic has covered a substantial share of its Covid-19 related expenditures. The Government announced a fiscal package of measures totalling about 14 percent of GDP (€24 billion), including loan guarantees, financed from national and EU resources.
  • The offering managed to attract a final orderbook in excess of €16.8bn at re-offer, implying 8.4x oversubscription, which compares to €16bn (8.0x oversubscription) of collected demand on the last deal from the Hellenic Republic priced on September 2nd.

 

Execution Summary

  • On the back of an inaugural social transaction by the European Union that recorded a combined orderbook of €233bn and a positive sentiment prevailing during and post its pricing, the Public Debt Management Agency of the Hellenic Republic decided to announce on 20th October its intention to tap 2035s Notes. Following a recovery in Asian market hours from the preceding trading day, the Republic announced its EUR benchmark tap at 8:30 UKT / 10:30 EEST on 21st October 2020. The guidance was set at the initial stage at the level of MS+135bps area.
  • With no direct competing supply announced on the day and Italy and Quebec being the only ones announcing their upcoming mandates, the orderbook grew exponentially already in the first hour post announcement – at the time of Update #1 at 9:35 UKT / 11:35 EEST book reached more than €10bn. Given solid size and quality of the generated demand, the Republic was able to tighten the pricing by 5bps to MS+130bps area.
  • The book carried to expand afterwards with €14bn of tabled demand at 10:55 UKT / 12:55 EEST, when the spread was set inside the level indicated at the preceding step at MS+125bps.
  • Final terms for the deal were released at 13:05 UKT / 15:05 EEST, setting the size of the offering at €2bn and declaring a book in excess of €16.8bn.
  • Throughout the day, the Hellenic Republic managed to tighten pricing by 10bps from the initial guidance stage, while seizing €2bn of size for the tap, bringing total outstanding amount of 2035s Notes to €4.5bn. The deal was priced at around 16:00 UKT / 18:00 EEST with a re-offer yield of 1.152%.
  • As far as a new issue concession (NIC) is concerned, based on where the Hellenic Republic’s secondaries were quoted before the announcement, the offering came with a NIC of high single digits, being in line with recent market precedents.
  • The offering attracted a diverse orderbook amounting to over €16.8bn (including €225mn of JLMs’ interest) from 280+ accounts involved in the transaction. Final investor composition proved to be versatile, with the UK partaking the largest chunk of demand, followed by Continental Europe accounts, who constituted 63% of the final allocated book. French fund managers as a group were the largest investors among European Union accounts, accounting for 17%. Greece-based accounts (mainly banks) also supported the deal, similar to the previous offerings. In terms of investor split, fund managers seized 2/3 of the offering, while the remaining part went to banks, hedge funds, insurance and pension funds etc.

Final Distribution

 

                    By Investor Geography                                                           By Investor Profile