New Greek bond returns to yield at sale
Greece’s new five-year bond returned on Wednesday to the yield at which it was sold last week, after a turbulent few days of trading.
The bond issue – which was Greece’s first in four years and came just two years after the country defaulted – was issued at a yield of 4.95 percent last Thursday.
However, when the bond was released to trade on Friday morning, the yield shot up with traders reporting widespread selling.
Some analysts said the final pricing was too aggressive, which was part of the reason for Friday’s sell-off.
Others said a high allocation of bonds to hedge funds, investors notorious for having short-term trading strategies, proved problematic.
Yields were spotted over 5.1 percent last Friday, but have since fallen back amid strong demand for peripheral bonds and expectations of asset purchases from the European Central Bank.
[Reuters]
