Greece is still an enormously indebted country with little prospects for growth, and yet many investors are eager to lend it money.
To wit: Thursday's 3 billion euro sale of five-year bonds, last offered at 4.95 percent, according to Thomson Reuters.
At first glance, that sale may seem a head-scratcher. As Citigroup analyst Giada Giani points out, Greece's debt-to-GDP ratio is now 177 percent, even higher than before its massive restructuring in 2012, when it stood at 156 percent. And while most countries' economies tend to grow within a couple of years of a restructuring—Greece's economy is still shrinking, albeit at a slower pace.
Giani put together the attached chart, which shows what an outlier Greece is compared to other countries that have undergone restructurings.
So why such heavy demand for Greece's debt? Here are five explanations.
1. Investors are hungry for yield. A yield of nearly 5 percent or more is hard to find these days. Buying an equivalent German bond is yielding less than 1 percent.
2. Investors ask for more than they really want. When it's known that demand is going to be high, investors often ask for as much as double what they really want. A hedge fund that wants to buy 100 million euros worth of the bonds will likely ask for at least 200 million. Those familiar with the international bond markets say true demand is lower than 20 billion euros, but clearly well above the 3 billion euros worth available for sale.
3. Perhaps most important: New investors are protected by the calendar. When it comes to a country's debt, it's not just how much they need to pay back, but when they need to pay it back. When Greece's debt was restructured in March 2012, old bonds they couldn't pay were exchanged for new ones that don't mature for a very, very long time—decades in some cases.
Besides some debt Greece owes to the ECB, Greece doesn't have any significant debt repayments until 2023, long after this new bond matures in 2019. By virtue of the calendar, these new bond holders are effectively senior to official government lenders that are owed more than half of Greece's debt and who are going to wait much longer for repayment.
In debt-market parlance, Greece now has a much improved "debt-maturity profile." According to Moody's ratings agency, before the restructuring, Greece's debt had an average maturity of only 6.5 years. After the restructuring, it went up to 17 years. Plus it got a much lower interest rate to boot—1.5 percent.
Imagine you were suddenly able to change a 17-year mortgage into a six-year mortgage with a drastically lower interest rate. Your cash flow would improve dramatically. (Yes, Greece is scheduled to begin repaying the IMF in 2017, but it is spread over seven years with a low-interest rate, making it manageable, relatively speaking.)
4. European leaders don't want to punish private sector lenders again. Private sector creditors were hit hard during the restructuring. Those familiar with the thinking of senior European leaders say they don't want to do that again for fear of driving creditors away, which would lead to higher interest rates. Investors believe any future losses will be paid by the European taxpayer.
5. The ECB has your back. Mario Draghi, the ECB's president, has promised to do whatever it takes to maintain financial stability in the euro zone. Just last week, Draghi revealed the ECB's governing board discussed the possibility of quantitative easing—buying government bonds to push interest rates lower.
—By CNBC's Michelle Caruso-Cabrera.