Photo: Wikimedia Commons
Despite the continued threat of anti-austerity protests in Greece, bond markets have become far more confident in the nation’s credit worthiness than they were just a few months ago.The 10-year Greek yield is now down to 9%, compared to nearly 12% around September.
Then just yesterday Greek government bonds attracted far more demand than was initially anticipated:
The Greek debt management agency said it had originally aimed to raise 900 million euros but as total bids reached 4.67 billion it ended up selling taking bids worth 1.17 billion euros (1.63 billion dollars).
The interest rate to investors dropped from 3.98 per cent offered in a similar issue on September 21, which had also been oversubscribed six times over.
“We have reason to be satisfied, because the yield came at 3.75 per cent, lower than in September, despite the fact that we issued three times the amount,” agency chief Petros Christodoulou told AFP.
Either the Greece crisis is over… or investors are becoming increasingly confident that the E.U. will back Greece financially, and thus indirectly bail out bondholders if need be. If you had bought Greek 10-year bonds when they yielded 12% then you’re now laughing.