More anticipating Greek default

With Greece getting ready to borrow some 300 million euros on the capital markets next week, a survey showed that a growing majority of experts believe the country’s economic woes will prove to be unsurpassable. The Public Debt Management Agency (PDMA) said yesterday that it will auction 300 million euros of 13-week treasury bills on Tuesday, continuing its strategy of monthly short-term debt sales. The PDMA, which faces no rollover need in November, is borrowing smaller amounts this month after the spike in yield spreads on the eurozone’s so-called periphery, brought about by rising sovereign creditworthiness concerns. Yesterday, the difference in yield between 10-year Greek government paper and German bunds of a similar duration was around 916 basis points. Greece switched to monthly issues of short-term government paper from quarterly sales in September, seeking to improve cash management as it struggles to emerge from its debt crisis. Successful issues of short-term debt could set the stage for Athens to become a more active issuer again after fears of it defaulting on its burgeoning debt effectively shut it out of the market. Greece faces a small rollover next month, as 480 million euros of three-month paper matures on December 24. It sold 1.17 billion euros of three-month T-bills at an average yield of 3.75 percent on October 19, down 23 basis points from 3.98 percent in a September sale. Meanwhile, the latest Bloomberg Global Poll showed that 71 percent of respondents believe that Greece will default, compared with 67 percent who said so in a September poll. Just over half (51 percent) said that they see a default by Ireland as being likely, while 38 percent said that Portugal is seen as going bankrupt. The poll of 1,030 Bloomberg customers – investors, analysts or traders – was conducted on Monday.

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