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* Greece to borrow 42 bln euros in 2009
* Greece eyes 10 bln via T-bills, 30 bln via 3-5-10-yr bonds
* Greece borrowed about 43.5 bln eur in 2008
By Lefteris Papadimas
ATHENS, Jan 7 (Reuters) - Greece plans to borrow about 42 billion euros ($52.3 billion) this year, a bit less than in 2008, via T-Bills and 3-, 5- and 10-year benchmark government paper, the head of the country's debt agency said on Wednesday.
"In 2009 we will borrow about 42 billion euros to cover maturing debt and interest payments," Spyros Papanicolaou, head of Public Debt Management Agency (PDMA) told Reuters in an interview.
He said Greece, one of the euro zone's most indebted countries as a percent of GDP, tapped capital markets for about 43.5 billion euros in 2008, exceeding its initial 40 billion euro target.
Greece is aiming to cut its public debt to 91.4 percent of GDP this year from 93.1 percent in 2008. With the government projecting economic growth of 2.7 percent, this year's borrowing will come to about 16 percent of estimated GDP.
Greece overshot last year's target and was forced to borrow about 43.5 billion euros in 2008 versus a 40 billion goal as government revenue turned out weaker than expected.
The country borrows under the name Hellenic Republic and is rated A1 by Moody's and A by both Fitch and Standard & Poor's. In October last year Fitch cut Greece's outlook to stable, citing higher-than-targeted budget gaps.
The government has said that servicing the public debt will cost about 4.5 percent of GDP this year or about 11.9 billion euros.
"2009 will be a difficult year as many countries will issue bonds to finance programmes to support their economies. Another reason has to do with the lower demand from hedge funds and central banks in Asia and the Middle East," Papanicolaou said.
Riots in December after the police shooting of a teenager coupled with a flight to core European bonds saw the premium demanded by investors for holding Greek government debt hit its highest in a decade. The spread of 10-year Greek government bond yields over benchmark German Bunds widened beyond 218 basis points.
"In this environment one has to be flexible as regards the implementation of borrowing plans. Demand for longer term bonds is weaker and we are not planning to issue bonds beyond a 10-year maturity," Papanicolaou said.
He said the yield spread of Greek 10-year government paper versus Bunds had begun to narrow lately and forecast further tightening ahead as demand for bonds tends to be higher early in the year.
"I believe Greece will not face any problem meeting its borrowing needs in 2009. Despite risk aversion, euro zone government bond issues are more attractive to investors than corporates or non-eurozone debt," he said.
Papanicolaou said Greece will kick off the new year with an issue of more than 2 billion euros of T-bills on Jan 13. PDMA plans to tap markets for 12 to 15 billion in the first quarter.
"Of the 42 billion euros of total borrowing, about 10 billion will be raised via T-bills and 30 billion from benchmark 3-,5-and 10-year bonds and private placements. we will also look at issues in other currencies, in U.S. dollars or yen," he said. (Reporting by Lefteris Papadimas) (Writing by George Georgiopoulos; Editing by Ron Askew)