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UPDATE 1-Greece eyes U.S. investors for new bond - report

Published 04/06/2010, 01:01 AM
Updated 04/06/2010, 01:08 AM

(Adds market reaction, combines media reports)

SINGAPORE, April 6 (Reuters) - Greece will launch a multi-billion dollar bond in the United States this month, selling itself for the first time as an emerging market as demand for its debt dwindles in Europe, the Financial Times reported.

Greece is seeking $5 billion to $10 billion from U.S. investors to help cover its May borrowing requirement of about 10 billion euros ($13.5 billion) to roll over maturing debt and meet interest payments.

George Papaconstantinou, Greece's finance minister, would lead a roadshow to the United States after April 20 but in contrast with plans at the start of the year he would not travel on to Asia, the FT quoted an unidentified official as saying.

"Greece is looking to diversify its investor base with this issue, which means attracting emerging market funds as well as other investors," the newspaper quoted one official as saying.

Separately, Market News International quoted unidentified senior Greek government sources as saying that Athens wanted to amend a deal struck at an EU summit last month to bypass an International Monetary Fund financial contribution because it is concerned that the IMF would impose tough conditions in exchange for aid.

"The reason is that since the summit, (Greek) Prime Minister (George Papandreou) has been receiving information from the IMF about the possible measures and reforms it would be asking in exchange for financial support," it quoted an official as saying.

"The measures are tough and might cause social and political unrest. After that, various cabinet members voiced their opposition to the IMF contribution."

The reports put the spotlight back on Greece's troubles, making the euro the big loser of the day, with its downtrend since December kicking back in after a brief rebound. The single currency fell 0.5 percent to $1.3418 and 0.9 percent to 126.08 yen.

Investor uncertainty was also fueled by a report in Britain's Daily Telegraph that wealthy Greeks and companies were looking to move their money outside the country.

It said that big depositors have been clamouring to move their cash to international banks such as HSBC or France's Societe Generale , which run large branches in Greece. They are among those to have received several billion euros of new money in recent weeks.

More than 3 billion euros of deposits held by Greek households and companies left the country in February, while in January about 5 billion euros of deposits were moved out, according to figures from the Bank of Greece, underscoring worries about capital flight from the country. (Reporting by Kim Coghill & Jan Dahinten; Editing by Tomasz Janowski)

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