Greece seeks urgent bridge financing
- 9 November 2012
- From the section Business
Greece is to make an urgent bid to raise funds from the financial markets in case it does not get another tranche of bailout aid in time to repay debts.
On Tuesday, it plans to issue bonds, repayable in one and three months, to cover debt repayments due on Friday.
The bond issue is to raise 3.12bn euros ($4bn; £2.4bn), to help the country repay creditors owed about 4bn euros.
Greece is negotiating to secure aid worth 31.5bn euros from the European Union and International Monetary Fund.
Without the aid, heavily-indebted Greece would face bankruptcy.
Manos Chatzidakis, an analyst at Beta Securities in Athens, said the four-week treasury auction was an unusual but necessary step.
It would keep Athens afloat until leaders of the eurozone meet on 26 November to approve payment of the latest rescue loans. Despite the Athens Parliament passing the hugely unpopular austerity cutbacks, the EU, IMF and European Central Bank are still reviewing the country's finances.
"This is bridge financing ahead of the November 26 decision, to ensure that there is no problem with [repaying] bondholders. It is unorthodox, but it's a form of bridge financing and not the beginning of regular such issues. It has a purely technical role," Mr Chatzidakis said.
The news came as Cyprus began a new round of talks about a bailout to support the country's ailing banks and service its debt payments.
Negotiators from the EU, ECB and the IMF - collectively known as troika - held talks with senior government officials from Cyprus's finance ministry and central bank. The talks are expected to continue into next week.
Cyprus has been unable to tap international financial markets for money since last year because of its junk credit rating. The country has been negotiating with Russia for money, but the talks are thought to have stalled.