Greece auctioned 4.063 billion euro ($4.92) in short-term debt to repay its 3.2 billion euro debt due on August 20 and stave off a sovereign default, the Public Debt Management Agency reported on Tuesday.
The auction for 13-week T-bills was priced to yield 4.43 percent and its bid-cover ratio was 1.32. Greek banks traditionally buy most of the T-bill issues to offer them as collateral for the local central bank to get much-needed liquidity.
A similar auction of 13-week paper last month raised 2 billion euros ($2.45 billion) at an interest rate of 4.28 percent and was 2.12 times oversubscribed.
The auction allows Greece to avoid seeking extra emergency funding, aside from the bailout loans it receives from the European Commission, the European Central Bank and the IMF.
The 3.2 billion euro bond, which matures on August 20, is held by the European Central Bank.
Greece, which is teetering on the brink of sovereign default, has relied on bailout loans since May 2010. The country has had to launch tight austerity measures to get emergency funding. The country’s new coalition government elected in June can get fresh emergency loans only after the troika of its creditors has finished analyzing Greece’s public finances and progress in implementing agreed austerity measures.