Greece Wednesday set out plans to issue its second bond since its international bailout four years ago, the latest step in the country's efforts to recover from a crippling debt crisis that left it on the brink of a euro-zone exit.

The Greek government is seeking to borrow at least EUR500 million ($680 million) for three-years. Some market participants reckon Greece could raise as much as EUR3 billion.

The deal--which is expected to be completed Thursday--comes after euro-zone finance ministers this week formally agreed to release EUR1 billion in bailout cash as part of Greece's international rescue package, signaling that the country's reform program remains on target.

"Greece continues to benefit from its rising primary surplus, increasing international investment and gradually improving unemployment and growth, " said Alberto Gallo, head of macro credit research at Royal Bank of Scotland.

Greece returned to the global bond markets in April after a four-year hiatus in which the country needed two bailout packages and a EUR200 billion debt restructuring to avoid financial collapse.

That deal in April raised EUR3 billion for five years at a yield of 4.95%, with bankers working on the sale saying it attracted some EUR20 billion of orders.

Greece's latest debt-market comeback comes amid the European Central Bank's efforts to keep borrowing costs in the euro zone depressed in a bid to boost the region's flagging economy. Last month, the ECB cut its main interest rate by 0.1 percentage point to a record low 0.15% and started charging banks for leaving funds on deposit overnight in Frankfurt.

That has pushed euro-zone government bond yields even lower. Spanish 10-year bonds fell to a record low of 2.58% in June, while Italian 10-year bonds hit a fresh low of 2.70% on Monday. Greek 10-year bonds--which had been yielding more than 30% in 2012--dropped to just 5.53% last month.

Even so, some investors are skeptical about Greece's return.

"There hasn't been a sufficient improvement in Greece's fundamentals; it is purely the liquidity backdrop and the hunt for yield that is allowing them to access the market," said Ben Bennett, a credit strategist at Legal & General Investment Management in London. "It is a sign of just how crazy and irresponsible the current market situation is."

Bank of America Merrill Lynch, Citigroup, Deutsche Bank, Goldman Sachs and J.P. Morgan Chase & Co. are the banks hired to manage the sale.

Write to Ben Edwards at

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July 09, 2014 09:15 ET (13:15 GMT)

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