Tuesday March 3, 2015 Search
Weather | Athens
11o C
6o C
News
Business
Comment
Life
Sports
Community
Survival Guide
Greek Edition
Greek yields drop on report EU mulling extending loans

Greek bond yields fell sharply on Wednesday after a media report said European Union officials were weighing extending the maturity of loans to Athens to 50 years, which could ease the debt burden on Greece.

Citing two officials with knowledge of the discussions, Bloomberg said the next bailout for Greece may include extending the maturity to 50 from 30 years, and cutting the interest rate on some previous aid.

An official close to Greece's debt negotiations with the troika had told Reuters as early as October that Greece may swap a big chunk of its bailout loans with a 50-year government bond as a way to achieve debt relief once it attains a primary budget surplus this year.

Given that a cut of Greece's nominal debt pile is not an option, Greek and European Union officials have repeatedly said that some combination of at least three measures were examined to provide debt relief. These were a further lowering of interest rates on existing loans, an extension of the maturities and pay-back schedule, and some relief on financing EU structural funds.

Greek 10-year yields slid 29 basis points to 8.12 percent with 30-year yields falling 24 bps to 7.82 percent, outpacing other eurozone peers including bonds issued by bailed-out neighbour Portugal.

The yields have dropped around 60 basis points this week, almost reversing their recent rise to 2014 peaks spurred by contagion to the eurozone's most battered debt market from the sell-off in emerging markets.

There has been a string of positive news on Greece, including a Reuters report on Tuesday that Athens and its international lenders had largely resolved differences over a potential fiscal gap this year, removing a hurdle to talks to release more bailout funds.

"Today's news is positive in terms of the Bloomberg report that the EU are considering reducing interest rates on the loans and moving forward with the programme, said Gabriel Sterne, chief economist at distressed debt brokerage Exotix.

"There are a lot of overhanging uncertainties the resolution of which will be of considerable comfort to markets, especially in an environment where the opinion polls are not looking good for the government. It is reasonable that markets are handing on to this sort of news and are very volatile."

Sterne was referring to signs of increasing opposition to austerity measures in Greece, where the ruling coalition has a three-seat majority in parliament. The opposition Syriza party, leading in the polls, has pledged to tear up the bailout deal.

In core eurozone markets, German yields fell back to six-month lows after a sale of five-year bonds drew solid demand fuelled by bets the European Central Bank will signal further monetary policy easing this week.

The sale of 3.28 billion euros of five-year bonds drew bids worth 1.7 times the amount offered and was sold at a lower yield than at a similar auction in January.

Lingering concerns over emerging markets and the ECB policy outlook is supporting demand for German debt, the eurozone's safe-haven of choice, even though yields in the secondary market are at six-month lows.

"Clearly the ECB is in play. A number of people think there will be a refi cut (on Thursday) and we are one of them. Certainly the prevailing consensus is you are going to get more easing in the next couple of months, said RBS strategist Michael Michaelides.

Five-year German yields were 2 basis points lower at 0.53 percent after the auction while the 10-year Bund yield was 3.4 bps down at 1.521 percent.

"Secondly, there are still some flows from emerging markets into safe haven markets (and) the data backdrop is not as strong as the consensus probably believes."

A fall in eurozone inflation to 0.7 percent last month, well below the ECB's target, and volatile money markets are piling pressure on the ECB to do more to pep up the block's weak recovery.

Money market prices suggest no change in ECB rates at its policy meeting on Thursday. The vast majority of 24 traders polled by Reuters said they did not expect the ECB to take its refinancing rate lower than the current 0.25 percent on Thursday or make any moves that could increase money supply and boost inflation.

[Reuters]

ekathimerini.com , Wednesday February 5, 2014 (16:02)  
PMI records drop in orders but rise in jobs
Fur exports to be hurt by ruble decline
Banking sector awaits progress with creditors
New record in Athens foreign air arrivals
Greek government searches for funds amid fresh speculation about third bailout
The government on Monday scrambled to find ways to raise much-needed funding amid renewed speculation about a third bailout for Greece. Finance Minister Yanis Varoufakis met with his deputie...
Ankara backpedals on Aegean military drill
Turkey on Monday backpedaled on plans to reserve a big chunk of air space over the Aegean Sea for military maneuvers until the end of the year, Greek officials said, following what appeared ...
Inside News
BASKETBALL
Waters turns from zero to hero for Kolossos Rhodes
For 40 minutes he was a real disappointment for his coach, Aris Lykoyiannis. His shooting rate was a miserable 1 in 10 two-point shots and he had made no three-pointers. On top of that he co...
SOCCER
Super League clubs promise to combat violence, again
The Super League clubs agreed on Monday to a blueprint of proposals for combatting violence in soccer grounds and will present it to Deputy Minister Stavros Kontonis to ask for the top fligh...
Inside Sports
COMMENTARY
Three options for the PM
There is one thing of which I am completely certain. If we want Greece to remain a member of the eurozone and to advance, the government faces a Herculean task. Prime Minister Alexis Tsipras...
EDITORIAL
Destination unknown
Alexis Tsiprass government is floundering in its own contradictions and risks taking the country down with it. The prime minister took on the responsibility of an agreement with our partner...
Inside Comment
SPONSORED LINK: FinanzNachrichten.de
SPONSORED LINK: BestPrice.gr
RECENT NEWS
1. Waters turns from zero to hero for Kolossos Rhodes
2. Greek government searches for funds amid fresh speculation about third bailout
3. Ankara backpedals on Aegean military drill
4. Ties between terror groups probed
5. Judges indict 21 over Skouries gold mine attack
6. PMI records drop in orders but rise in jobs
more news
Today
This Week
1. Greece to make international protest over Turkey reserving Aegean air space
2. Greek reforms could prompt bailout payment in March, says Dijsselbloem
3. EU Commission: seeking unity in EU after Spain, Portugal clash with Greece
4. Schaeuble urges Greece to implement reforms during extension
5. Next Greek aid deal will emerge in coming months, Moscovici says
6. ECB uncomfortable with leading role in Greek funding drama
Today
This Week
1. Greece to make international protest over Turkey reserving Aegean air space
2. A fierce battle looms
3. SYRIZA feeling the pain
4. Spain said to lead push to hold Greece to terms as Podemos grows
5. The unlikely winners of Greece's surrender on euro
6. Tsipras reversal draws Greek sympathy as party rumblings rise
Find us ...
... on
Twitter
... on Facebook
About us  |  Subscriptions  |  Advertising  |  Contact us  |  Athens Plus  |  RSS  |   
Copyright 2015, H KAΘHMEPINH All Rights Reserved.