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Greece offers first long-term bond since 2010 at 4.95%

Greece saw huge demand on Thursday for a new five-year bond in its first long-term bond issuance in four years.

The offer attracted orders around 20 billion euros ($27.7 billion). The country was set to sell 3 billion euros worth of five-year debt at a lower-than-expected yield of 4.95 percent.

Greece has received two bailouts since 2010 from the International Monetary Fund, European Central Bank and European Commission. At one point, yields on its 10-year debt soared to 30 percent as markets panicked about the possibility of Greece being forced out of the euro zone.

POLITICAL RALLY FOR THE NEW DEMOCRACY PARTY AHEAD OF THE GREEK G
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The government had guided pricing at a 5-5.25 percent yield.

Demand had been expected to be high, in part because investors are looking for higher yields than the more common 3-4 percent on euro zone sovereign bonds.

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Greece's economy is still seen as shaky. The popularity of its bonds may be more of a bet on the ECB eventually embarking on more asset purchases than market confidence in its recovery, according to Bill Blain, strategist at Mint Partners.

"It won't make a blind bit of difference to Europe or Greek economic performance, but it's (the spread on Greek bonds) going to tighten. For a while," he said.

Shortly after the auction, official data showed unemployment in Greece fell month-on-month to 26.7 percent in January, down from 27.2 percent. However, unemployment was marginally higher year-on-year—in January 2013 it stood at 26.5 percent.

Contact Europe: Economy

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