Yields drop as Greek bond sale pulls in investors

Elizabeth Fournier
INVESTORS piled into Greece’s return to global capital markets yesterday, as the state raised €3bn (£2.47bn) through a bond sale that attracted more than €20bn of orders.

The successful sale of five-year debt is Greece’s first foray into the bond market since 2010, when the IMF and EU were forced to put together a €110bn rescue package for the struggling Eurozone country.

“Today, Greece took one more decisive step to exit the crisis,” Prime Minister Antonis Samaras said in a televised speech. “Confidence in our country was confirmed by the most objective judge – the markets.”

Investors were offered a yield of 4.95 per cent on the five-year notes, lower than predictions of around five per cent. “The concern is that this speaks to a wider issue of the desperate search for yield,” warned analyst Jasper Lawler of CMC markets.

Yields across the Eurozone’s peripheral economies fell as the level of demand for Greek debt became clear, with 10-year bond yields in Ireland, Portugal and Spain all dipping by five basis points on the day.

The bumper sale came amid growing tension in the country, and in the wake of a 24-hour strike by both public and private sector workers.

In the early hours before yesterday’s bond sale, a car was blown up on a street near a central bank building in Athens. No-one has yet claimed responsibility for the attack, which caused damage but no injuries.

€3bn raised
€20bn in orders
Yield of 4.95%