Greece Bags $5 Billion From Investors Offering Killer Yield As Investors Bet On ECB Backing

Greece successfully pulled off a five-billion euro bond issue that was massively over-subscribed, indicating the investors loved the 6.5% yield:

The Star:

The bond was three times oversubscribed – meaning demand exceeded available bonds – within an hour of the book opening. Offers received total led 15 billion euros, or $20.5 billion (U.S.). The government was seeking a maximum of five billion euros ($6.8 billion), said Petros Christodoulou, chief of Greece’s debt management agency.

The sale reflects on Greece’s ability to raise money to pay off expiring bonds and avoid the risk of default. Though final figures were not immediately available, a note from UniCredit Research said the yield would be around 6.5 per cent – more than double the yield on benchmark German bonds of similar maturity. While expensive for the issuer, the yield is about 50 basis points lower than last week, the note said. 50 basis points equals half a percentage point.

Anyone buying Greek bonds right now is likely to be betting on European Central Bank backing for Greece should things get more ugly. If there is an ultimate back-stop, then 6.5% is a steal.

And Don’t Miss: What Do People Really Think Of The Greek Crisis?

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