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Investing

Greece To Raise 3 Billion-5 Billion Euros In Junk Debt, Maybe

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By Douglas A. McIntyre Published
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Greece has decided to raise three billion to five billion euros through a 10-year bond. The country has hired several banks including Barclays (BCS) and HSBC (HBC) to handle the transaction.

The bonds have not been priced, and perhaps they never will be.

Greece will try to rely on the support of other eurozone nations which may buy some of the paper. But, Germany recently said it will not help bail out Greece and that may include avoiding an investment in the bond issue. If Germany turns it back on Greece, the capital markets likely will as well.

Greece may have to pay dearly to get the money and that may derail the issue. The nation has 23 billion euros in debt service due in the spring and investors will use that as a form of usury. Greece may not be able to pay the sort of double-digit interest  rates that corporations issuing junk debt do.

The most certain reason that investors will turn their backs on Greece is if the nation’s unions continue work stoppages, which are already severely damaging the economy. Buying bonds which rely on whether a country will be seized by chaos is likely to be a losing proposition.

Douglas A. McIntyre

Photo of Douglas A. McIntyre
About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.

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