Greece Completes Bond Sale

By Dow Jones Business News, 
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Greece said on Thursday that it had completed the sale of a three-year bond, the second in three months, though demand for the government paper was lower than expected amid dented sentiment for debt in the euro zone's weaker economies.

In a statement, the Greek Finance Ministry said that offers for the bond reached EUR3 billion ($4 billion), of which EUR1.5 billion were accepted.

Some market participants had estimated that Greece could have raised as much as EUR3 billion from the bond sale. The bond will yield 3.5%.

"Despite the exceptionally negative climate that was created yesterday and today in international markets, and particularly in the markets of the periphery, Greece raised EUR1.5 billion from the total," the ministry said in a statement.

The deal is Greece's second in three months following a four-year hiatus in which the country needed two bailout packages and a EUR200 billion debt restructuring to avoid financial collapse.

Greece's previous bond sale in April--a five-year deal that raised EUR3 billion at a yield of 4.95%--attracted orders of around EUR20 billion.

Sentiment in so-called peripheral debt has taken a hit because of growing financial concerns about the health of the parent company of Portugal's largest lender, Banco Espírito Santo.

Spanish companies including Banco Popular Español and Actividades de Construcción y Servicios were both forced to scrap bond sales on Thursday as market conditions deteriorated.

Still, the weaker backdrop wasn't the only reason people steered clear of Greece's bond deal.

"There is still too much political and social unrest to invest in Greek bonds," said Jeffrey Sica, president and chief investment officer at U.S.-based Sica Wealth Management, which manages more than $1 billion in assets. Until there are successive years of growth and stability, "Greek bonds are too speculative to invest in," he said.

Bank of America Merrill Lynch, Citigroup, Deutsche Bank, Goldman Sachs and J.P. Morgan Chase & Co. were the banks hired to manage the sale.

Emese Bartha in Frankfurt contributed to this article

Write to Stelios Bouras at stelios.bouras@wsj.com and Ben Edwards at ben.edwards@wsj.com

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