ECONOMY

Greek corporate bonds slump as Samaras warns of euro exit risk

Greek corporate bonds fell amid concern the nation could exit the euro area after elections this month, raising the risk of default.

Glass manufacturer Yioula Glassworks SA’s 185 million euros ($220 million) of 8.5 percent notes declined two cents on the euro to a record 88 cents, the biggest drop since the bonds were issued in May, according to data compiled by Bloomberg. The 500 million euros of 5.5 percent securities sold by Public Power Corp., Greece’s biggest electricity provider, fell 1.5 cents to a low of 78 cents.

Greece’s political parties are campaigning for a Jan. 25 election that Prime Minister Antonis Samaras warned would cause the country to default and quit the euro region should the main opposition Syriza party win. German Chancellor Angela Merkel considers a Greek exit from the euro to be manageable, according to Der Spiegel magazine.

“Some investors don’t want anything Greek in their funds,” said Steven Logan, head of European high yield at Aberdeen Asset Management Plc in London, which has about $520 billion of assets under management. “People are wondering whether we’re entering a new wave of the euro crisis.”

]Bloomberg]