Brussels, 20/12/2011 (Agence Europe) - On Tuesday 20 December, Greece rolled over €1.3 billion in three-month treasury bonds for 4.68%, slightly up on the most recent such emission (15 November, 4.63%), announced the Greek public debt management body (PDMA) the same day.
This bond emission comes at a time when the European bond market is more relaxed after the announcement by eurozone finance ministers of a loan to the International Monetary Fund, but does not necessarily mean that Greece, the weak link in the euro chain, has won back investor confidence. The PDMA explains that the treasury bonds were under-subcribed almost threefold, with supply of €2,910 billion for the initially proposed €1 billion. The increase in the yield shows that investors are still wary of Greece, as it negotiates with its private creditors to write off some €100bn of its €350bn debt through a 50% write-down for bond-holders. Rates went down slightly in the summer for Greece, but went back up in October shortly before the eurozone arranged the second bailout (including the bond write-down). The first rescue programme in May 2010 released some €110bn in EU and IMF loans because Greece was unable to get long-term loans from the money markets due to fear about the scale of its debt, expected to reach 161.8% of GDP by the end of the year. Spain has also been in the crossfire, but for a much lower level of debt, and managed on Tuesday to roll over €5.64bn in three- and six-month bonds in its final debt emission of the year, at a much reduced interest rate. (LC/transl.fl)