When the truth hurts, sometimes it's better to manage its eventual disclosure.

Crisis-stricken Greece is in dire need of funding. Yet rather than issue new bonds via auction right now, whereby the market might be shocked by a worse than expected result, Greece is considering something more discrete -- a private placement with banks, essentially a privately negotiated loan, according to the managing director of the country's Public Debt Management Agency.

Thus they can discover what the market rate for Greek debt ahead of time, outside of the lime light, and then do damage control afterward should the interest rates banks require them to pay be far worse than expected. It's not exactly a sign of confidence.

Bloomberg: Greece may borrow privately through banks by the end of January, the second such transaction in as many months, following cuts to the government’s credit ratings, according to the country’s debt manager. The decision on whether to use a private placement will depend on reaction to the country’s stability and growth program, Spyros Papanicolaou, the managing director of Greece’s Public Debt Management Agency, said today.

The country had earlier considered offering bonds through a syndicate of banks. “We are yet to decide whether to go ahead with a syndication,” Papanicolaou said today in a telephone interview from Athens.

“We might do a private placement instead. It will depend on how the stability and growth program is received by the European Commission and the markets.”

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