Greek Bond Yields Tumble to a Record Low After Fitch Upgrade
Greek Bond Yields Tumble to a Record Low After Fitch Upgrade
(Bloomberg) -- Greek bonds rallied to send benchmark yields to the lowest on record after a Fitch Ratings upgrade paved the way for the government to raise debt more cheaply.
The 10-year rate fell to 1.155%, below a previous all-time low touched in November, after Fitch lifted the nation’s rating by one notch to BB with a positive outlook on Friday. Greece’s government may issue a new bond as soon as this week, according to a person familiar with the plan, marking another step in its return to markets after a decade-long debt crisis.
Greece’s debt was the top performer in Europe last year as a recovering economy and more stable politics drew investors to yields that remain the best in the euro-area. While Fitch’s rating is now the highest since the country entered the bailout era in 2010, it’s still two levels below investment grade.
“This upgrade and positive outlook open the way for more upgrades in the following months,’” said Alexandros Malamas, a trader at Piraeus Securities in Athens, who expects the 10-year yield to fall to 1%.
DBRS Ltd, which rates Greece at CCC, and Moody’s Investors Service that has the nation at B1, are scheduled to update their ratings in April and May respectively.
While not yet finalized, the Finance Ministry may sell a new 15-year bond as a first step in the country’s financing program for this year. Investor interest in such an offering would signal confidence in Greece’s long-term debt sustainability because the notes would mature in 2035, after a euro-area safety net expires.
To contact the reporters on this story: James Hirai in London at jhirai3@bloomberg.net;Sotiris Nikas in Athens at snikas@bloomberg.net
To contact the editors responsible for this story: Dana El Baltaji at delbaltaji@bloomberg.net, Neil Chatterjee, Constantine Courcoulas
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