K government bonds were crushed yesterday after the finance ministry denied a report that it had hired Goldman Sachs to promote the sale of more than £20bn worth of Greek bonds to the Chinese.
Traders had hoped that a major funding in China could help its budget crisis.
Reports had also suggested that the government, which is under severe financial pressure because of its massive debts, was considering the sale of a stake in Greek lender National Bank of Greece.
This suggestion was also rebutted.
“We categorically deny that there is any direct or indirect agreement between the Greek government and Chinese or other investment funds to purchase debt, Greek bonds or Greek assets,” the Greek finance ministry said in a statement.
“Likewise, we categorically deny that any mandate has been given to an investment bank to negotiate these issues on behalf of the Greek government.”
However, Greek officials have said that the country plans to move ahead with a new 10-year bond issue in the next two to four weeks.
That led to selling pressure yesterday as the market adjusted to the new supply.