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November 27 2009

Issuer strategy: Greece's dark cloud gets a silver lining

Although Greece currently has the lowest sovereign rating in the eurozone and the highest budget deficit ratio, its membership was enough to reassure investors that its 15-year issue in November was a safe bet. Writer Edward Russell-Walling
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Its economy is in seriously bad shape. Its sovereign credit rating has been downgraded by two agencies this year and placed on negative outlook by the third. And yet the Hellenic Republic - Greece - still managed a sell-out with its 15-year bond issue in November, raising €7bn. Membership of the eurozone, like the American Express card, comes with its privileges.

Greece has long been regarded as one of the weakest economies in the EU, part of the 'slow-lane' eurozone club - Portugal, Ireland, Greece and Spain - known as the PIGS. Greece's change of government in October, when the socialist Pasok party supplanted the right-wing New Democracy party, led to the revelation that things were worse than suspected.

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