BLBG: Greek Bond Yields Climb Most Since Aftermath of Syriza Election
Greek government bonds headed for their worst week since the aftermath of Syriza’s election as the nation remained locked in negotiations to secure funding and avoid a default.
The yield on 10-year securities climbed to the highest since December 2012 on Thursday as officials worked to reach an agreement before Greece faces payments of almost 1 billion euros ($1.1 billion) next month. Credit-default swaps suggested there was a 80 percent chance of Greece being unable to repay its debt in five years. Yanis Varoufakis, finance minister in the Syriza party-led government which was elected Jan. 25, said Thursday it wasn’t “toying with” an exit from the euro region.
“Greece is coming to the fore again,” said Lyn Graham-Taylor, rates strategist at Rabobank International in London. “It seems to be a very difficult position. You’ve got to think they will avoid a messy default but there is a risk. Greece yields will probably carry on rising.”
The nation’s 10-year yield climbed three basis points, or 0.03 percentage point, to 12.76 percent at 11:16 a.m. London time, after rising to 13.20 percent on Friday, the most since December 2012. The yield has advanced 152 basis points this week, the most since the week ended January 30. The 3 percent security due in February 2024 fell 0.105, or 1.05 euros per 1,000-euro face amount, to 49.185.
