Greek economy: Last rating report for 2022 from S&P

The curtain falls tonight on the annual cycle of Greece’s ratings for 2022 with the S&P report. Amid the high yields on the 10-year Greek government bond, which have exceeded the psychological limit of 5%, the agency will give a “verdict” on the country’s prospects for the coming year, which for Greece will be an election year.

With the S&P report – and depending on the assessment and the conditions in the bond yields – the Public Debt Management Agency (P.D.M.A.) is working on bond reissue in the next two months. The information states that Greece wants to present itself and send a message to the markets that it is able to borrow, despite there being no need for financing, and despite the difficult international conditions.

New borrowing

The financial staff and the PDMA also plan new borrowing to the tune of 7-10 billion euros in 2023 and an early repayment of memoranda loans of 2.6 billion euros by the end of this year. According to Public Debt Management Agency and the Ministry of Finance’s plans, next year’s programming is to be limited, and borrowing will fluctuate at the levels of 2022, due to the increased yields in the markets. This means around 7-10 billion euros. Meanwhile the issue of a Greek “green” bond, which was postponed due to international circumstances, is back on the table.

Thus, there may be no surprises in terms of credit rating upgrades, however, the markets and the Ministry of Finance are waiting for the messages from S&P. Positive messages may give the green light for a possible reissue in the near future. The focus is on the course of the debt, the banking sector and of course the agency’s augurs for upcoming upgrades, with the aim of reaching investment grade in 2023.

No surprises

No surprises are expected from rating agencies in the near term, as market executives’ estimates point to Greece’s upgrades coming after the 2023 elections, factoring in the ongoing macroeconomic uncertainty in Europe. Moreover, S&P upgraded Greece very recently, only in April 2022, one step below investment grade, to BB+, from BB with a positive outlook. On October 14, Fitch maintained Greece’s rating two notches below investment grade (BB), with a positive outlook. Moody’s in September confirmed Greece’s Ba3 rating with a stable outlook and DBRS at “BB high”, with a stable outlook.