Bond yields drop ahead of anticipated swap


Greek state bond yields have shown a significant decline since the start of the week, as, according to Bloomberg, November 13 is the most likely date for the new issues that will replace the paper stemming from the Greek debt restructuring of 2012, or private sector involvement (PSI).

Bloomberg added that the swap will concern a series of 20 bonds worth 29.7 billion euros that will turn into four or five bonds maturing between 2023 and 2042.

In Wednesday’s trading the yield of the Greek two-year sovereign bond fell below the 3 percent mark to 2.94 percent, five-year paper traded at 4.33 percent from 4.43 percent and the benchmark 10-year debt dropped to 5.28 percent from 5.42 percent on Tuesday.

International analysts note that the Greek bond swap is aimed at improving the liquidity of the Greek security market and will form a range of interest rates that will pave the way for Greece’s full return to the markets. The biggest benefit for investors is that they will be able to perform transactions in four separate state bonds with varying maturities. Nowadays trading is more difficult as transactions are made in total for all bonds without traders being able to buy or sell securities of different maturities separately.