Greece appointed five banks to handle a new seven-year bond issue on Monday - the first after eurozone nations agreed on a plan to help the debt-ridden country should it find itself unable to pay off loans.

The Public Debt Management Agency named Alpha Bank, Emporiki Bank, ING, Bank of America—ML and SG as lead managers for the bond issue but did not specify an amount. The debt will come due on 20 April 2017.

Greece needs to borrow some euro54 billion ($72 billion) this year, and the country must refinance some euro20 billion in April and May. It has been able to sell bonds in issuings that have been oversubscribed - but at interest rates it says are not sustainable.

Despite the rescue package agreed on in Brussels on Thursday, borrowing costs remain high. The interest rate gap, or spread, between Greek 10-year bonds and equivalent German issues - a key indicator of market trust - hovered at 308 basis points on Monday, marginally up from the 305 basis points on Friday. The spreads had fallen from Thursday’s 330 basis points after news of the bailout plan.

The narrower the spread, the more confidence markets are showing in Greece. The current rate translates into roughly twice the borrowing costs of Germany - a rate that Athens has repeatedly said is unsustainably high.

The plan agreed on Thursday by the 16 eurozone countries would provide individual loans from other eurozone countries and funding from the International Monetary Fund, in order to rescue Greece if the country finds itself unable to borrow or pay its debts.

The financial crisis in Greece, whose budget deficit stands at 12.7 percent for 2009 - four times over the European Union limit - has rocked the euro. Athens hopes the existence of the rescue package will restore market confidence and diminish fears of a Greek default, leading to a reduction in borrowing costs.

The Socialist government has already announced a series of harsh austerity measures, including cuts in pay for civil servants, pension freezes and tax increases.

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