Dramatic developments in the European government bond market, where the spread between the Greek 10-year and German bunds widened to over 300bps on Thursday — the highest level since the Hellenic Republic joined the eurozone:
Interestingly, Greece chose Thursday to announce a $1.5bn-$2bn global (i.e. non-European) sale of government bonds. From the Wall Street Journal:
SINGAPORE–Greece plans to sell global bonds worth at least $1.5 billion to $2 billion to investors in Asia and the U.S., a senior finance ministry official said Thursday.
“We’re looking to widen the investor base beyond Europe,” said Spyros Papanicolaou, director-general of the Public Debt Management Agency.
. . .
Despite Greece’s fiscal woes—which have battered the value of the euro and even prompted speculation that Greece would leave the euro zone—Mr. Papanicolaou said Athens wasn’t seeking any debt guarantees, such as from the European Union, for the planned bond.
He railed at what he called misleading media reports that exaggerated the extent of Greece’s fiscal problems. Greece is “a full fledged member of the European Union and, more importantly, of the euro zone.” Talk to the contrary is “rubbish,” he said. “Greece isn’t a Latin American country,” he said. “We are a wealthy European country with a high standard of living.”
It’s just that they don’t want any more Greek debt…
And just to put things in perspective, here’s a table of European bond-Bund spreads, courtesy of Monument Securities’ Marc Ostwald:
One thing missing from that list is Portugal, where the spread is about 103bps, the widest since July 13.
Pity using a certain Porcine acronym creates such a fuss.
Related links:
Grεεk dεbt disastεr – FT Alphaville
The sovereign debt premium – FT Alphaville
Portugese budget situation `critical’: IMF – AsiaOne