Greece will auction €1.25 billion of 26-week T-bills on May 10, continuing its monthly short-term debt sales amid record high bond yield spreads, the country's debt agency PDMA said today.

Greece switched to monthly issues of short-term debt from quarterly sales in September last year to improve cash management as it struggles to emerge from a debt crisis.

Up until March, the heavily indebted country was funding itself on short durations at a lower cost than the 5.2 per cent rate on its EU-IMF bailout loans. A summit of euro zone leaders in March agreed to cut the rate by one percentage point and stretch out the repayment period.

PDMA needs to roll over €480 million of six-month paper maturing on May 13th and another €480 million of three-month T-bills on May 20th.

Last month, Greece sold €1.625 billion of six-month T-bills at 4.80 per cent, with the yield rising by five basis points from a March sale.

Foreign investors bought about 41 per cent of the issue.

PDMA said the settlement date for the 26-week T-bill auction will be May 13th. Only primary dealers will be allowed to participate and no commission will be paid.

The agency said non-competitive bids up to 30 per cent of the auctioned amount may be submitted during the auction. Additionally, non-competitive bids up to another 30 per cent of the auctioned amount may be submitted until May 12th.

Reuters