GREECE - Pension funds were among the buyers of €3.5bn in inflation-linked long-dated bonds issued by the government yesterday (updates to delete Greek).

IPE has learnt they were among the likely investors to have contributed to the deal, which helped Greece raise a total of almost €17bn this year.

"It's a mix, though you would not be wrong to think that pension funds were among the investors," said Frederic Zorzi, co-head of European syndicate at BNP Paribas, one of the banks involved in the deal.

The amount raised was increased yesterday from €2.5bn after €10.5bn in orders were taken from investors for the bonds, which mature in 2030.

Philippe Bradshaw, executive director at ABN Amro, another bank involved in the deal, was quoted as saying in the Financial Times that the deal shows how the investors community as well as the rating agencies have improved their view on the Greek economy, despite Greece still having the lowest credit rating in the euro zone.

"They are prepared to buy Greek long-dated paper now. Two or three years ago, things would have been different," he said.

The bond is linked to euro zone consumer price inflation, priced with a coupon of 2.3% and giving a spread of 30 basis points over French index-linked bonds.