Photo: fdecomite

Just a few years ago, Greece and its companies were virtually shut out of international capital markets. While Greek companies made cuts or were required to rely on state funding to plug gaps, the government itself was reliant on the IMF and European Central Bank to remain solvent.

But in 2014, the capital tide is turning and a series of Greek companies and the government itself are returning to international capital markets.

Greek banks have had a rough few years as the economy slowed, property values plunged, and loans went bad. This led Greece's four largest banks to undergo a combined 28 billion euro recapitalization in 2013, of which the vast majority was funded by the government through the Hellenic Financial Stability Fund (HFSF).

Stress test results have indicated a need for a combined 6.4 billion euros among Greece's largest banks for 2014. However, the banks are widely expected to tap private markets for capital this time.Two major Greek banks have already completed share and debt sales to plug their capital holes and two more are also expected to do so.

After previously stating it would not issue new shares, National Bank of Greece (OTC:NBG.DL) reversed course last week planning a 2.5 billion euro share offering alongside a 750 million euro debt offering. The proceeds are expected to be raised without government funds and some of the raise will go toward repurchasing 1.35 billion euros of preferred shares owned by the government.

Eurobank (OTC:EGFEY) is also moving forward with its own share offering which has been expected for months. Looking to raise 2.86 billion euros, Eurobank is already finding solid interest among investors. A group led by Fairfax will buy 47% of the capital raise at a discount of around 25% from the trading price. As a result, the HFSF's current 95% stake in Eurobank will see significant dilution.

Powering up
Although Greece still needs electricity, paying for it has been a problem and has meant some major pain for Public Power Corporation. The Greek power utility owns transmission lines, generation facilities, and mines making it a vertically integrated monopoly style corporation. Adding uncertainty to the company are poor economic conditions and the 51% stake owned by the Greek government.

As Greek banks tap capital markets, Public Power Corporation is preparing to issue a 500 million euro bond sometime after Easter according to ekathimerini. With international confidence in Greece returning, investors should look for other Greek companies to look for private capital.

Government sale
After being locked out of private capital market for years, Greece's government has returned to private investors for bond sales. The nation tested the waters recently with a 3 billion euro bond issue with a 4.95% yield, below analyst forecasts.

Although Greece still has a long way to go, this small bond issue does show that the international markets are beginning to change their position on Greece. It will still be a long time before Greece can be free of loans from the ECB and IMF but the nation's ability to raise at least some capital from private markets could help its bargaining position in future negotiations.

Funding the recovery
When capital dries up, bad things happen to a nation's economy. But as capital begins flowing into Greece again, the nation's banks can lend and the government's financial position can provide greater stability.

Keep looking for Greek companies and the Greek government to test capital markets as needed and reduce their reliance on non-private markets over the next few years.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.