Tagged: Greece bonds
Spain, Ireland, Greece Sell Debt as `Funding Pressure’ Eases
Bloomberg | Jul 20, 2010
Spain, Ireland and Greece sold almost 10 billion euros ($13 billion) of debt, with demand rising for shorter-dated securities, on optimism the European Union’s aid programs will contain the region’s fiscal crisis. Hungary raised less than planned at a sale of three-month bills, triggering a decline in the forint. Greece, which activated an EU-led bailout package in May to avoid default, auctioned 13-week bills, with investors bidding for 3.85 times the amount on offer, compared with a bid-to-cover ratio of 3.64 times at a sale of 26-week securities a week ago. Spain and Ireland also sold debt.
“Overall funding pressure is losing steam,” said David Schnautz, a fixed-income strategist at Commerzbank AG in London. “We expect the peripheral markets to enjoy even more potential outperformance against the core. Obviously we still have this event risk looming with the banks’ stress tests.” Concern that Europe’s high-deficit countries wouldn’t be able to meet their financing needs pushed yield premiums to euro-era records and led the EU to design a 110 billion-euro bailout for Greece and a broader 750 billion-euro backstop for the region. The debt crisis prompted governments across Europe to impose additional austerity measures to convince investors they were serious about taming their deficits.
Greece bond issue clears test of investors’ confidence
BBC NEWS | 2010/04/13 | 10:10:50 GMT
Greece has raised 1.56bn euros ($2bn; £1.3bn) in an over-subscribed bond issue that was a key test of investor confidence in the debt-laden country. The issue is Greece’s first debt sale since Sunday’s agreement by eurozone countries to provide Athens with a financial safety net if it defaults. However, Greece had to agree to pay a higher rate of return to investors to get the latest bond issue away. The yield on 12-month bonds was 4.85%, and on 6-month notes it was 4.55%. This compares with a yield of 2.2% paid on 12-month bills, and 1.38% on 6-month bonds, in an issue it made in January. Greece’s debt management agency had originally sought to raise 1.2bn euros from the issue.
Ben May, an economist at Capital Economics, said the issue looked "pretty successful" and was likely to ease some immediate concerns among investors about Greece’s financial health. "It’s a positive endorsement of the [eurozone] bail-out measures that went out over the weekend," Mr May said. "But clearly the yields are still very high… so it does not really change the underlying position that Greece has very tough times ahead."
Greece May Find U.S. Bond Sale No Cheaper Than Europe
Bloomberg | April 7, 2010 | 08:27 EDT
Greece may discover it’s no cheaper to sell bonds in the U.S. than in Europe as the government seeks to persuade investors it can plug the region’s biggest budget deficit. Investors may demand a yield of as much as 7.25 percent to buy Greek 10-year dollar bonds, 414 basis points more than benchmark German bunds and 331 basis points more than Treasuries, according to Paris-based Axa Investment Managers, which oversees about $669 billion. TCW Group Inc., which manages $115 billion in assets from Los Angeles, says Greece may have to offer a premium of as much as 400 basis points over Treasuries.
Petros Christodoulou, director general of Greece’s Public Debt Management Agency, said March 31 the country planned a “roadshow” in the U.S. and maybe Asia to drum up investor demand for a sale of dollar-denominated bonds. The country may offer as much as $10 billion of the securities, the Wall Street Journal reported the same day. Greece is struggling to tackle a budget deficit that is equivalent to 12.7 percent of gross domestic product, more than four times the European Union’s 3 percent limit. “U.S. investors won’t want to be paid less than what European investors are demanding,” said Stuart Thomson, who helps oversee more than $100 billion as chief market economist at Ignis Asset Management in Glasgow, Scotland. “The market wants them to say we would do what’s necessary to get funding costs down and if that means a more aggressive reduction in expenditure, then so be it.”
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