Greece chooses banks for bond return - sources

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Alex Chambers, Robert Hogg

Greece has hired six banks to arrange its comeback sovereign bond deal, according to sources, as it seeks to break a three-year impasse that has shut it out of the international debt markets.

One source said that Greece has mandated Bank of America Merrill Lynch, BNP Paribas, Citigroup, Deutsche Bank, Goldman Sachs and HSBC for a five-year trade.

The source added that the deal could arrive as soon as next week, but that timing remains uncertain as the sovereign awaits signoff by its official creditors.

The deal could also form part of a liability management exercise, according to two further sources. One option considered was for investors to extend maturities via a tender for its €3bn due April 2019s. Another option would involve tendering for - or buying back - so-called “strip” - securities created as part of Greece’s €206bn debt restructuring in 2012.

The banks declined to comment.

Greece, rated Caa2/B-/CCC, is said to be looking to raise €2bn-€4bn. The trade is not expected to be straightforward, given that relief on Greece’s €326bn debt pile remains elusive, and the country’s sovereign bonds are still not eligible to be bought under the ECB’s quantitative easing programme.

The sovereign last issued in July 2014, when it raised €1.5bn in notes which matured on 17 July 2017. It also raised €3bn in April 2014, which is due April 2019.