Greece successfully sold debt to private investors for the first time in three years Tuesday, taking a significant first step toward financial independence when its third international bailout ends next year.

The deal came a month after eurozone finance ministers signed off on a new loan and sketched out measures to chip away at Greece’s debt mountain after the current bailout finishes in August 2018.

Greek Finance Minister Euclid Tsakalotos hailed the successful sale, saying it was “a beginning” and a sign of confidence in the country’s economy.

“There will be a second and a third [market foray], to approach August 2018 with confidence and emerge from the bailouts,” he said.

In the test run to ensure it will be able to rely on market funding next year, Athens sold 3 billion euros of new five-year bonds alongside a tender to buy back outstanding five-year paper issued in 2014. That was to help lower its repayments in the years following the bailout exit.

Less demand

The deal did not attract as much demand as the country’s brief foray into markets in 2014, but Athens paid less to borrow the same amount.

The bonds were priced to yield 4.625 percent, 32 basis points below a bond of similar duration that Athens last sold in 2014. The coupon was set at 4.375 percent versus 4.75 percent on the 2014 bonds.

“The return of Greece to the capital markets was and is the goal of the ongoing adjustment program. We therefore welcome the fact that Greece has the chance to return to the market on a step-by-step basis,” a spokeswoman for the finance ministry in Germany, Europe’s biggest economy, said.

Analysts said some investors may be put off Greek government bonds because they have the lowest credit rating in the eurozone and are not eligible for purchase by the European Central Bank under its quantitative easing scheme.

When Greece sold 3 billion euros of five-year bonds in 2014, demand reached over 20 billion euros from 600 investors. Tuesday’s sale saw demand come from about 200 investors, a government official said.

Thomson Reuters’ International Financing Review reported over 6.5 billion euros of orders had been placed.

Greece’s comeback has been timed to take advantage of its borrowing costs hitting seven-year lows. But it is still paying 3.9 times Portugal’s borrowing costs on five-year paper.

A treasurer at one of Greece’s big banks, who wished to remain anonymous, told Reuters that he expected a large chunk of demand for the bond came from domestic banks and pension funds. He added that the deal would also open the way for Greek banks to borrow in capital markets.

Turning a page

Athens lost market access shortly after it sold bonds in 2014 because its newly elected leftist government quarreled with creditors over debt relief.

Some investors may have been put off by that experience, analysts said, especially as there are lingering concerns about Greece’s debt mountain. That stands at 180 percent of economic output versus the 60 percent or falling toward 60 percent required by the European Union.

“Given Greece’s fundamentals, the problem with this bond sale is that it fuels speculation about investor willingness to lend to an almost insolvent country,” said ABN AMRO senior fixed-income analyst Kim Liu. “Regardless of the success of the deal, debt-to-GDP levels of Greece will still be at high levels.”

But Europe’s economics commissioner, Pierre Moscovici, said Tuesday that he was confident Greece was “turning a page” from its economic crisis.

The bond sale is also emblematic of the recovery of the eurozone as a whole, coming five years after European Central Bank President Mario Draghi brought the bloc back from the brink of splintering with a pledge to do “whatever it takes.”

The International Monetary Fund, which has lent financial support to Greece alongside the European Union and the ECB, upgraded its 2017 gross domestic product growth projection for the eurozone and pointed to “solid momentum.”

“We believe that changes in the European political landscape, together with recent strong economic data, mean the bond should perform well,” said Nicholas Wall, a portfolio manager at Old Mutual Global Investors.

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