Business
Greece set to end its bond market exile
LONDON/ATHENS – Greece, at risk of crashing out of the euro zone just two years ago, will issue its first sovereign bond in almost four years on Thursday, seeking to send a strong political and economic signal it is on the way out of its debt crisis.
International banks have been mandated to sell a benchmark five-year, euro-denominated bond under British law, with the sale to be completed “in the immediate future,” the country’s finance ministry said in a statement.
According to sources speaking to Reuters and Thomson Reuters news and information service IFR, pricing is set for Thursday. Two investors said Greece was sounding out an indicative yield of 5.25 percent to 5.5 percent.
“We aim to raise up to 2.5 billion euros on Thursday,” one government official said. “It will be a great success if the coupon is below 5.3 percent.”
The sale is an important milestone for one of Europe’s most troubled economies. The last time it sold bonds, as opposed to very short-term paper, was back in March 2010.
Greece has been since kept afloat by 218 billion euros of European Union/International Monetary Fund bailout money and about 15 billion euros of treasury bills.
Athens has no pressing funding needs but wants to test the waters for more and bigger bond sales in the future, as part of its strategy to cover all its funding needs from the market by 2016.
The sovereign has hired Bank of America Merrill Lynch, Deutsche Bank, Goldman Sachs International, HSBC, JP Morgan and Morgan Stanley to arrange the deal.
POLITICS PLAY ROLE
Athens originally planned to tap bond markets in the second half of the year, after more tangible evidence that its ongoing, six-year recession is over.
But rapidly falling bond yields and pressure to produce an economic success before the European Parliament elections in May have persuaded Prime Minister Antonis Samaras and his fragile coalition government to bring the sale forward.
In a dramatic turnaround, existing Greek 10-year bond yields dropped below 6 percent for the first time in four years on Wednesday, down from about 40 percent two years ago, when Athens imposed severe losses on private bondholders in a 130-billion euro restructuring [ID:nL6N0N132Z]
On Tuesday, foreign investors also snapped up about 80 percent of a 1.3 billion euro six-month T-bill issue.
Greece’s debt currently stands at about 320 billion euros, or 175 percent of GDP. It is rated nine notches below investment grade at Caa3 by Moody’s. Standard and Poor’s and Fitch rank Greece six notches below investment grade at B-.
But despite its size, the country’s debt is attractive to investors because its 2012 restructuring has made it sustainable for ten years, the head of euro zone rescue fund ESM Klaus Regling said on Saturday.
About 80 percent of Greece’s debt is in the hands of the European Union and the International Monetary Fund, at very low interest rates and on a long repayment schedule. Private creditors are holding just about 30 billion euros of bonds with maturities between 10 and 30 years.
The Greek opposition opposed the bond sale, accusing Samaras of acting hastily on party-political motives. “Going out to markets is one thing. Exiting the crisis is another,” said the Democratic Left party. Samaras’s ruling coalition has a parliamentary majority of just two seats.
DON’T FORGET THE JOBLESS
Public anger about the economic pain in still running high Greece, which has seen unemployment soar to nearly 28 percent and almost a quarter of whose economy was wiped out in the austerity-fuelled recession.
Labor unions staged a nationwide strike on Wednesday to protest against austerity policies imposed on the country by its foreign creditors, including Germany, whose Chancellor Angela Merkel will visit Athens this week.
“All the joy about the bond market exit shouldn’t make us forget that 1.5 million people are unemployed in Greece,” said Nikos Koutsoukis, senior official at GSEE, the country’s biggest private sector labor union.
For all the green shoots, it is too early to talk about long-term economic stability. Thousands of businesses closed across Greece last year.
But economic data released on Wednesday add to evidence that its economy is bottoming out after six years of recession that wiped out almost a quarter of its gross domestic product.
Industrial production rose in February at an annual pace of 1.7 percent, the first time the reading rose for a third consecutive month since the end of 2007.
PPC, the country’s biggest power producer is set to become later this month its first state-controlled company to issue a bond since the debt crisis erupted.
– REUTERS
Business
Tesla Aims for 2028 Commercial Production of Flying Car
Tesla has set a 2028 commercial production date for its new Roadster sports car that can briefly rise into the air using rocket technology.
According to CNN, the date was revealed when the manufacturers demonstrated its functionality on Thursday at a SpaceX testing facility in Texas, United States, where the two-seater vehicle performed a series of manoeuvres, including driving upside down before making a short airborne movement.
The prototype was operated without a driver during the test, with Musk saying the decision was taken “to make sure we don’t kill anyone.”
“Success is not guaranteed. I mean that. It’ll probably work, but if it doesn’t work, we’re at a safe distance,” he said.
READ ALSO: 2027 Election: ‘Your Future Is More Valuable’ — IGP Warn Youths Against Political Violence
CNN reported that the vehicle uses 10 nozzles and high-pressure air tanks to generate thrust, with Musk claiming it could accelerate from zero to 60 miles per hour in less than a second.
The Tesla boss attributed the development to cooperation between the electric vehicle manufacturer and SpaceX, the rocket company he also leads.
He described the project as “the results of what happens when you have a collaboration with the world’s best car company and the world’s best rocket company.”
Musk also sought to assure spectators that the demonstration was genuine, saying, “We need an audience to prove that it’s not AI or SI. So you guys can tell people you saw it with your eyes, because what you see with your eyes, you will not believe.”
Despite the display, questions remain about whether the vehicle can achieve sustained flight and how practical it would be for everyday transportation.
Roger Conner, curator for vertical flight at the Smithsonian’s National Air and Space Museum, told CNN that combining the requirements of road vehicles and aircraft presented significant engineering challenges.
“Aircraft are extremely sensitive to weight, whereas with ground vehicles you want them to have bumpers and crumple zones and all that,” he said.
“Inevitably, something that is a hybrid between the two is going to be a poor performing aircraft and a poor performing vehicle, and also quite expensive,” he added.
Conner questioned whether the demonstration amounted to flying in the conventional sense.
“We’re not talking about sustained flight. We are literally talking about hopping,” he said.
However, Jim Dukhovny, chief executive of flying car startup Alef, said the technology was achievable, while pointing to the difficulties involved in making such vehicles transition safely from vertical take-off to forward flight.
“It absolutely is 100% feasible,” he told CNN.
“That being said, the hardest part on all eVTOLs, and for us, it’s a transition from (rising) vertical to (moving) forward. It needs to be extremely careful, making sure you do not lose lift, and making sure it’s very stable,” he added.
CNN also reported that Alef’s prototype weighs about 254 pounds, uses eight propellers and is designed to carry one person.
Musk said Tesla intended to begin production of the new Roadster in 2028.
CNN reported that the latest display adds to Musk’s ambitions to push Tesla’s vehicle technology beyond conventional electric cars, although the prototype’s ability to operate as a practical flying vehicle has yet to be established.
Business
Marketers Eye Portion of FG’s Petrol Discount
The Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN) has urged the Federal Government to add its member-stations to the petrol discount programme.
It cautioned that the current arrangement could limit the reach and deny vast consumers in underserved communities the benefits of the 30-day discount window.
The PETROAN also urged the FG to allocate at least 30 percent of the discounted petrol volume to outlets operated by its members.
READ ALSO: Tanzania Nears Completion of $42bn Equinor, Shell-Led LNG Project
The calls followed last week’s announcement by the Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, of a petrol discount at Nigerian National Petroleum Company Limited (NNPC Ltd) retail outlets, with priority given to public transport operators nationwide.
According to the National Publicity Secretary, Independent Petroleum Marketers Association of Nigeria (IPMAN), Chinedu Ukadike, the exclusion of independent marketers could undermine the programme’s effectiveness, particularly in communities where NNPC retail outlets have limited presence.
He argued that independent marketers, with their extensive nationwide distribution networks, were better positioned to extend the benefits of the intervention to consumers in remote and underserved areas.
“Independent oil marketers have over 90 percent coverage and presence in the nooks and crannies of this country. You are giving NNPC that is situated only in the town. So how do the poor masses, whom you intend to ensure that this petroleum product will alleviate their sufferings, how would they now get it?” Ukadike asked.
He said the association was not opposed to the government’s policy but insisted that independent marketers should be included to ensure wider access to the discounted product.
“But it’s government policies; we are not against government policies, but let it be all-inclusive; let independent marketers be part of it,” he said.
Ukadike also urged the government to extend the discount period to 60 days, citing logistical challenges that could delay the movement of petrol from coastal depots to other parts of the country.
“And the 30 days should be extended to 60 days. Because of the circulation of petroleum products, most times it takes two weeks for a truck to leave Apapa and get to Gombe, Maiduguri, because of the bad road and all the rest of them and loading process,” he added.
Similarly, PETROAN National President, Billy Gillis-Harry, urged the Federal Government to allocate 30 per cent of the discounted petrol volume to the association’s retail outlets to facilitate broader national distribution.
Business
Tanzania Nears Completion of $42bn Equinor, Shell-Led LNG Project
In the bid to transform Tanzania into the East African regional energy hub, the country is on the verge of concluding an agreement with a consortium of energy companies, including a $42 billion LNG project.
It was gathered that the project is designed to tap the 47.13 tcf of gas discovered in Tanzania’s deep offshore fields, part of the country’s estimated 57.54 tcf in total discovered reserves, the sixth-largest in Africa, behind Nigeria, Algeria, Senegal, Mozambique and Egypt.
READ ALSO: Shell Identifies Keys to Nigeria’s Energy Future
Equinor and Shell would be the lead operators, alongside involvement from ExxonMobil Pavilion Energy and Medco Energi, while state oil major, the Tanzania Petroleum Development Corporation (TPDC), would also hold an equity stake in the project.
“It’s almost there,” Khamis Mussa Omar, Tanzania’s finance minister, told Reuters.





