Athens, welcome back to the (bond) market

Greece plans to issue bonds next week for the first time in three years, according to news reports. Rumors had circulated that the country would make a return to debt markets early this week. But the government pushed back the date of its five-year bond issue to next week to avoid higher borrowing costs, according to Greece’s Kathimerini newspaper. Since the weekend, the country’s bond prices have risen as investors hope the proceeds will strengthen Greece’s finances.

Athens' return is important to show that the reforms under the current bailout program are working to both international investors and Greek voters. However, the government needs to get the timing right to avoid any political or economic backlash.

Members of the IMF's executive board are due to meet Thursday to discuss issues related to the Greek bailout, including the sustainability of its debt. The Fund's opinion on the Greek bailout is crucial given that it's promised to contribute to the financial rescue, although it hasn't yet said by how much. The IMF has also been a vocal supporter of making Greece's debt more sustainable.

“We want to have our first return to the bond markets at the best possible timing. I can assure you this won’t happen with the goal to impress. This will be a part of our global strategy for regaining definitive access to the markets,” said government spokesman Dimitris Tzanakopoulos at the weekend, according to a report.

Graded as junk by credit credit-rating firms, Greek sovereign bonds will only be available for purchase to hedge-fund investors and so-called sophisticated investors.