Greece will launch a multi-billion euro bond issue next week, the Financial Times reported Saturday, in the wake of Thursday's deal to help the country out of its debt crisis. Petros Christodoulou, the head of Greece's public debt management agency, told the paper Athens wanted to borrow some five billion euros ($6.7 billion) from the bond markets. “We would like to return to the market within March,” he added. Greece is likely to issue either a three or seven-year bond this month, followed by another similar-sized issue in April in what will be a crucial test of confidence, the FT said. A deal was brokered Thursday under which the 16-nation euro zone agreed to offer Greece loans in combination with the International Monetary Fund. The deal came at a crucial time for Athens, which has to ensure funding by May to repay debt of 20 billion euros ($27 billion). “We believe we will not need to use it,” Greek Prime Minister George Papandreou said afterwards, adding: “Greece has regained credibility. Its banking sector is not threatened and the money is there safely.” Meanwhile, the borrowing rate at which Greece can raise money on debt markets fell on Friday. The yield on Greek 10-year bonds - the interest rate which Greece has to pay to borrow money - eased to 6.193 percent late Friday in a sign of investor confidence. The rate had gone up to almost seven percent earlier this year as investors worried about a possible default. Lingering concerns remain among investors over how the financial rescue will work in practice and over the role of the International Monetary Fund, as well as over the fiscal problems that the Greek debt drama exposed. European stock markets fell Friday in a cautious reaction to the EU's rescue plan for Greece. London's benchmark FTSE 100 index fell 0.43 percent, the Paris CAC 40 ended down 0.29 percent and the Frankfurt Dax lost 0.21 percent. “The Greek yields have gone down a lot. But considering the news, one could have expected an even sharper fall,” said Nordine Naam, a bond market strategist at Natixis, a French investment bank. The International Monetary Fund was trying on Friday to understand precisely what its role will be in a European-led rescue of Greece. A day after euro zone leaders agreed to provide coordinated loans to Greece with the help of the IMF, officials at the Washington-based lender were unclear over how the Fund's resources would be tapped and how it would impose the sort of conditions that normally come with its financial aid. In its first comments since the EU announcement, the IMF said it was monitoring developments. “We are following developments closely,” the IMF said, repeating that it stood ready to consider any financial assistance if asked. IMF Managing Director Dominique Strauss-Kahn begins a short visit to Poland and Romania on Monday where he is likely to encounter questions on Greece. The IMF's website said he is likely to call for closer cooperation and reforms to Europe's architecture. The dilemma for the IMF is that Greece falls under the jurisdiction of European Union rules and is a member of the euro zone where monetary and foreign exchange policies are dictated by the European Central Bank.
