OTE eyes big Greek corporate bond issue OTE, the Greek telecoms company, is on course to issue one of the country's largest corporate bonds since the sovereign debt crisis erupted, in a sign of improving funding conditions across the eurozone periphery. As Greek 10-year government bond yields dropped below 10 per cent on Tuesday for the first time in more than two years, the company said it was issuing a five-year euro-denominated bond in its first fundraising effort since 2011. While OTE said the total issuance size would be decided in the coming days, sources close to the deal said it could have a benchmark size of around €500m, which would be the largest from a local corporate since OTE's last issuance two years ago. News of the deal follows the disclosure that almost €100bn of private funds flowed back into the eurozone's periphery late last year, according to ING, after action by the European Central Bank encouraged reinvestment in crisis-hit countries. Late last year Greek dairy group FAGE priced a $250 bond in the first issue since the sovereign bailout, while earlier this month Titan, the Greek cement company, exchanged €200m of debt for longer-term bonds. It is not clear what yields OTE will have to pay to issue its new debt, but others have been forced to pay for their refinancing despite improving conditions. Titan refinanced 6.9 per cent bonds due in July for four-year debt paying a fixed coupon of 8.75 per cent. OTE is part-owned and managed by Germany's Deutsche Telekom. It has a Caa1 rating from Moody's and B minus from Standard & Poor's. It has about €1.3bn of bonds maturing by April 2014. Analysts said that the new bond reflected improving confidence in the eurozone periphery, but warned that investors were still being highly selective with the credits they were choosing to invest in. Shares in OTE are up 220 per cent since Mario Draghi, president of the ECB, pledged to do "whatever it takes" to save the euro. The MSCI Greece index is up 30 per cent in the same period. OTE said that its new bond issue would finance a buyback of bonds maturing in 2013 and 2014 at 100 per cent and 102 per cent of face value respectively. OTE has declared debt reduction as a goal and plans disposals. "The total amount of bonds to be bought back will be determined within the next days and will depend on the successful completion of the new bond issue," said OTE. Earlier in the month Hellenic Petroleum, the Greek oil refiner, said it secured €605m in fresh three-year bank loans to replace debt maturing later in the year.