Greece marks strong return to bond market after car bomb

Officials blame left-wing groups for attack that occurred just hours before country re-enters global bond markets
April 10, 2014 9:30PM ET
Despite an early morning car bomb explosion outside a Bank of Greece building in central Athens on Thursday, buoyant Greek officials hailed the country’s return to the international debt market after four years as an overwhelming success.

Investors snapped up the five-year bond in a sale that was eight times oversubscribed.

The bombing earlier in the day had smashed windows in nearby shops but caused no injuries, police and witnesses said.

The blast struck hours before Greece planned the foray into the international bond markets, the country’s first since it was hit by a debt crisis four years ago, and a day before a visit by German Chancellor Angela Merkel.

A police officer, speaking on condition of anonymity, told Reuters that someone had anonymously warned a newspaper of the attack about 45 minutes before the explosion just before 6:00 a.m. local time. The caller said the device contained about 154 pounds of explosives.

There was no immediate claim of responsibility, but police believe leftist or anarchist groups were behind the attack, the official said.

Makeshift bomb and arson attacks have escalated since Greece adopted unpopular austerity measures in exchange for financial bailouts by the European Union and International Monetary Fund in 2010.

Despite the latest attack, the finance ministry said it had raised $4.14 billion with a 4.75 percent coupon — a lower borrowing rate than the five percent initially hoped for and $500 million higher than Athens’ original target.

The sale is a milestone for Greece. It has been locked out of the markets since it nearly went bankrupt in 2010, when its borrowing rates spiked upon the revelation that its public debt was much larger than previously estimated.

“The reception of the five-year bond has exceeded all expectations,” Prime Minister Antonis Samaras said in a televised statement. “International markets have expressed, beyond any possible doubt, their confidence in the Greek economy.”

Samaras said the strong result would bolster investors’ confidence in Greek debt, allowing it to borrow at cheaper rates in the future. He cautioned, however, that the country still had “quite a way to go to emerge definitively from the crisis.”

Wire services

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