Greece struggles to raise $2.63b ahead of loan talks

08:57, April 22, 2010      

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Greece Tuesday raised 1.95 billion euros ($2.63 billion) in treasury bills, drawing major demand, but had to pay over double the last equivalent rate as returns on its benchmark 10- year paper hit a new record.

"The total bids reached 6.92 billion euros ($9.33 billion) and the amount finally accepted was 1.95 billion," the Greek debt management agency said in a statement.

The agency had originally sought to raise 1.5 billion euros ($2.02 billion).

It added that buyers were offered a uniform yield of 3.65 percent compared to 1.67 percent in the last three-month bill issue in January.

The auction - the third in a week - comes after the rate of return on Greek 10-year government bonds rose to a record 7.80 percent Tuesday.

The yield was already at 7.61 percent late Monday - way beyond the level that Greece can afford to pay if it is to get through its debt crisis.

Greece needs to raise tens of billions of euros (dollars) on financial markets this year to cover its debt and budget obligations, of which it needs about 11 billion euros ($14.8 billion) by the end of May to avoid default on old debt falling due for redemption.

Greece's finance minister insisted Tuesday that the debt-hit country's economy would not be "left hanging" next month as it can call on funds from an EU-IMF backup loan mechanism if needed.

The Greek government is scheduled to confer today with officials from the European Union, the European Central Bank and the International Monetary Fund on the small print of the joint loan guarantee. The meeting was initially due Monday but delayed by the air-travel chaos in Europe caused by volcanic eruption.

The EU-IMF rescue deal is worth up to $61 billion at an interest rate of around 5 percent in the first year.

Source: Global Times


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