Greek yields rise as it sells €1.6bn T-bills

Steve Dinneen
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Greece’s Public Debt Management Agency (PDMA) sold €1.625bn (£1.4bn) of 6-month T-bills yesterday, with the yield rising by 11 basis points compared to an auction held last month.

The sale was well covered with the bid-cover ratio at 3.6 versus 4.54 in the previous auction. Greece paid a yield of 4.75 per cent, up from 4.64 per cent in the 8 February auction, the debt agency said.

Foreigners bought nearly a third of the issue, PDMA chief Petros Christodoulou said.

The Greek yields were hit by a Spanish plan to launch a new bond by syndication, adding to unease in peripheral markets. The Portuguese bond yield hovered near record highs and Italian yield spreads also widened.

Spanish debt underperformed the Eurozone benchmark German Bund following news of Madrid’s plan to launch a new 15-year bond. The Spanish issue is understood to be for between €3bn and €5bn.

Portugal will auction a round of short-dated bonds this morning as it seeks to fund itself through markets, resisting pressure to accept an international bailout.

The yield on 10-year Portuguese debt continues to set new highs, in part driven by rising yields across the Eurozone as the European Central Bank prepares markets for a rise in interest rates. Its 10-year bonds have yielded more than seven per cent for more than a month.

Greek Prime Minister George Papandreou said the EU must adopt a “safe environment for the euro, and subsequently for the management of debt, to convince markets.”

He said Greece’s credit downgrade by Moody’s Investors Services was “unjustified”.