Greece’s short-dated government bond yields fell on Monday following a decision by S&P Global Ratings to upgrade Greece for the first time in two years.
S&P raised Greece’s credit ratings by one notch to ‘B’ after the close of markets on Friday, citing improvements in the finances and fiscal outlook for the debt-laden south-eastern European nation.
The ratings upgrade boosted sentiment towards a bond market that has benefited in recent weeks from expectations that Greece will exit its bailout program this year.
Short-dated Greek government bond yields were down 6 basis points at 1.32 percent.
Five-year Greek bond yields were down about 3 bps at 2.81 percent, while longer dated bond yields were slightly higher on the day.
“Certainly Greece has made a great deal of progress recently and risks are far lower,” said Jennifer McKeown, chief European economist at Capital Economics.
“Given how much its debt costs have been pushed down, a ratings upgrade probably makes sense.”