Piraeus Bank Greek Corporate Bond Index
Given the lack of liquidity in the Greek banking system in addition to the overall trend for alternative sources of financing of non-financial corporations from outside the banking system, there is an upward trend of corporate bonds issuance by large Greek corporations with an international orientation. Greek enterprises, seizing on the significant improvement in the investment climate and in particular on the interest of foreign investors in Greek assets have started a new cycle of corporate bond issuance in 2013, as this trend continues in 2014.
Despite the increased investor appetite, until now there hasn’t been an index reflecting the overall evolution and total returns of this nascent section of the market. Filling this gap, the Greek Corporate Bond Index reflects the price of key corporate bonds that have been issued by Greek corporations.
The high total returns of Greek bonds reflect the sharp decline in Greek bond yields, which derives from the decrease in the Greek risk premium. In addition to investors’ capital gains, the decline in Greek bond yields will have a wider positive influence, as it makes issuing new corporate bonds even more attractive. The new issues will correspond to the new lower interest rate, significantly reducing financing costs for Greek corporations and allowing them to utilize their resources not only to refinance previous loans, but also to finance new investment schemes.
The Piraeus Bank Greek Corporate Bond Index is available in Bloomberg. The ticker is PBGGGCBI Index and the full name is Piraeus Bank Greek Corporate Bond Index. Further information regarding the Index characteristics, the constituents, the methodology and the re-balancing details & updates can be found in the following publications.
Group Chief Economist