ECONOMY

Record high for yields

Greece’s credit rating downgrade to junk by agency Standard & Poor’s sent its bond yields and insurance costs to new records on speculation the country will find it more difficult to repay its debt. Credit default swaps on Greek government bonds climbed 111 basis points to 821, according to CMA DataVision. Portugal rose 54 basis points to 365 after it had its sovereign ranking lowered by the New York-based ratings company. Yields on Greek two-year notes surged above 18 percent, the highest since at least 1998, on concern bondholders will be forced to take losses as the country grapples with the highest debt ratios in the European Union. Governments bonds of the euro region’s other most indebted nations fell, while German debt rallied as investors sought safer assets. The yield on the Greek two-year note rose 505 basis points to 18.99 percent in late trade in London. The yield on the 10-year bond climbed 45 basis points to 10.05 percent. Responding to the news yesterday, Greece’s Finance Minister Giorgos Papaconstantinou said the ratings cut does not reflect the true fundamentals of the country’s economy and that the government will be able to meet all of its borrowing obligations.