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The interest rate on quarterly government bonds which the Greek government emitted this week reached 4.1% percent disappointing local economic analysts. All hoped its value will not pass the psychological barrier of 4% showing thereby that international markets value the efforts of the local government to change the course of the economy in 2010.

Short-term bonds were worth 500 million euros and the government earned 650 million euros from the trading. The interest rate had the same value as the last trading of quarterly bonds in November 2010.

According to the information of the Public Debt Management Agency, bids reached total of 2.49 million euros which covers 4.98 times the amount required. These levels are also known from the last similar bid held last year. Petros Christodoulos who is president of the institution told Reuters that 80% of the investors interested in the Greek bonds are foreigners, but the organization has accepted non-competitive bids amounting to 150 million euros.

The bid was held by primary dealers and the deadline is Friday, January 21, 2011. Additional non-competitive bids may be placed until 12 o’clock on Thursday, January 20 and may reach 30% of the total accumulated value. The Public Debt Management Agency stressed that no delay will be allowed.  

It became clear at the same time that the credit rating agency Fitch lowered the credit rating of five major Greek banks. The credit rating of National Bank of Greece, Alpha Bank, the Eurobank EFG, Piraeus Bank and ATEbank (Agricultural Bank) was reduced in the long run from BBB to BB+ and in the short run from B to F3, the outlook being negative. Financiers estimate that the lowered credit rating of the five banks is not really important and it will not affect their funding from the European Central Bank.

Some analysts associate the lowering of the credit rating of the banks with the macroeconomic situation in the country which currently has no access to free funding from international markets.