The issuance of a five-year Greek state bond under the UK law which took place last April, after four years of the country’s exclusion from international capital markets, was beneficial for the Greek state, Public Debt Management Organization said on Thursday.

In a report submitted to Parliament, in response to a question by SYRIZA deputies Panagiotis Lafazanis and Efklides Tsakalotos over the use of UK law in the five-year Greek bond issue, the Organization said that “the homogenity of bond market is a decisive factor for bond trading, liquidity and help in falling yields” adding that the decision to issue the five-year bond under UK law was taken in order to carry the same clauses included in the new Greek state bonds issued after a debt buy back program in December 2012.

The Organization noted that “adopting the same characteristics for the new five-year bonds, combined with high demand and a relatively low offer was a key factor in turning excessive demand towards older Greek bonds, raising their prices in the secondary market and helping to further lower their yields. “Additionally, holders of existing bonds, who also participated in the latest issue, saw their assets continue rising, helping the issuer to make a new beginning for more affordable borrowing costs,” the report said. The Organization noted that “there are no additional preferential terms of guarantee for the investors in the five-year bond issue”.

It also added that the issue should be judged on the terms of an isolated effort to drain capital from international markets at a low interest rate, but basically as a form of intervening in the yield curve towards creating a functional bond market.

The Organization said that the aim of the five-year bond issue was to begin a new dialogue with capital markets, putting the country back into the map of interest for international investors, to facilitate the supply of liquidity in the Greek economy, to facilitate the reduction of Greek state debt through safeguarding safety capital of the support mechanism and finally achieving an essential relocation of investor base from hedge funds towards long term real money investors.

Another aim of the issue was also to lower the average borrowing cost of the Greek state through the creation of a new intermediate point in the yield curve and boosting liquidity in the secondary bond market.