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UPDATE 3-Greek 10-year bond issue attracts bids worth nearly $40 billion

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ATHENS, Jan 27 (Reuters) - Greece’s new 10-year bond issue attracted bids worth nearly $40 billion on Wednesday, officials and bankers told Reuters, in a sign the country’s debt is back in favour three years after it emerged from international bailouts.

It was the highest demand for 10-year Greek bonds since 2010 and a senior official said Greece raised 3.5 billion euros at a yield of about 0.8%, or mid-swaps plus 100 basis points, after receiving bids worth more than 32 billion euros ($39 billion).

“It is the first time Greece has borrowed in the 10-year tenor with a cost lower than 1%. It is a historic low,” said Costas Boukas, head asset manager at Beta Securities.

Greece last sold 10-year debt in September 2020 with a yield of about 1.2%, though yields in the secondary market have since come down and were trading at 0.696% on Wednesday.

The finance ministry has said it plans to borrow 8 billion to 12 billion euros this year to maintain a continuous presence in international debt markets.

Greek debt became eligible last year for purchase by the European Central Bank as part of its stimulus measures in response to the coronavirus pandemic.

Barclays, Citi, Deutsche Bank, Morgan Stanley, Nomura and Eurobank were appointed to jointly lead manage the issue.

Earlier this month, Greece raised 2 billion euros ($2.4 billion) by reopening a 30-year bond through a private placement with two Greek banks.

Greece is aiming to reduce its ratio of debt to gross domestic product - estimated at 208.9% in 2020 after it rose sharply during the pandemic - and preserve a cash buffer from unused bailout loans and money raised from markets. ($1 = 0.8281 euros) (Reporting by Lefteris Papadimas and Renee Maltezou; Editing by Larry King and David Clarke)

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