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Greek Debt Head Christodoulou Rules Out Restructuring
September 09, 2010, 8:58 AM EDT
By Anchalee Worrachate and Andrea Catherwood
(Updates with debt chief’s comments from third paragraph)
Sept. 9 (Bloomberg) -- Greece won’t restructure its debt and will stick to austerity measures it pledged as part of a 110 billion-euro ($140 billion) bailout, said Petros Christodoulou, head of the nation’s debt management agency.
“No one is even contemplating or thinking about” debt restructuring, Christodoulou told Andrea Catherwood on Bloomberg Television’s “The Pulse” program today. “The general public is very supportive of our measures.”
Investors remain reluctant to buy Greek debt after the country in May turned to the European Union and International Monetary Fund for a bailout. The extra yield that investors demand to hold Greek 10-year bonds compared with German bunds rose as high as 957 basis points yesterday, 16 points short of the record touched on May 7.
Standard Life Investments, which has $175 billion in assets under management, said on Sept. 7 that it wasn’t tempted by high yields offered by peripheral bonds, which are for “adrenaline junkies.” It remains skeptical about the fiscal outlook for Europe’s most indebted nations, including Greece.
The IMF said in a Sept. 1 report that “current market indicators of default risk seem to reflect some market overreaction.”
‘Technical Situation’
“We are in a technical situation whereby those who cannot hold sub-investment grade bonds had to sell, and we have had an absence of buyers,” Christodoulou said. “We don’t have buyers because no one is actively marketing Greek debt. People are holding back. They want to see how the austerity package pans out first.”
Greece’s deficit-cutting measures are “off to a very, very good start,” George Zanias, chairman of the Greek Finance Ministry’s Council of Economic Advisors, told “The Pulse” in an interview today. “The indication so far is very good and we are on track. I’m positive we will be able to deliver.”
Greece will start selling its Treasury bills on a monthly basis from this month, instead of offering them quarterly, to keep regular market access. The debt office will focus on three- month and six-month bills rather than 52-month bills, Christodoulou said.
“There is no point paying up in terms of yields to access 12-month money when long-term financing is provided by the package,” he said. “We feel it’s not productive to be absent for two or three months and then return to the market to raise a big amount.”
State financing needs are fully covered by loans under the plan agreed on with the EU and IMF, and the government is able to roll over its “relatively small stock of T-bills,” Greece’s Finance Ministry said on Aug. 24.
September 09, 2010, 8:58 AM EDT
By Anchalee Worrachate and Andrea Catherwood
(Updates with debt chief’s comments from third paragraph)
Sept. 9 (Bloomberg) -- Greece won’t restructure its debt and will stick to austerity measures it pledged as part of a 110 billion-euro ($140 billion) bailout, said Petros Christodoulou, head of the nation’s debt management agency.
“No one is even contemplating or thinking about” debt restructuring, Christodoulou told Andrea Catherwood on Bloomberg Television’s “The Pulse” program today. “The general public is very supportive of our measures.”
Investors remain reluctant to buy Greek debt after the country in May turned to the European Union and International Monetary Fund for a bailout. The extra yield that investors demand to hold Greek 10-year bonds compared with German bunds rose as high as 957 basis points yesterday, 16 points short of the record touched on May 7.
Standard Life Investments, which has $175 billion in assets under management, said on Sept. 7 that it wasn’t tempted by high yields offered by peripheral bonds, which are for “adrenaline junkies.” It remains skeptical about the fiscal outlook for Europe’s most indebted nations, including Greece.
The IMF said in a Sept. 1 report that “current market indicators of default risk seem to reflect some market overreaction.”
‘Technical Situation’
“We are in a technical situation whereby those who cannot hold sub-investment grade bonds had to sell, and we have had an absence of buyers,” Christodoulou said. “We don’t have buyers because no one is actively marketing Greek debt. People are holding back. They want to see how the austerity package pans out first.”
Greece’s deficit-cutting measures are “off to a very, very good start,” George Zanias, chairman of the Greek Finance Ministry’s Council of Economic Advisors, told “The Pulse” in an interview today. “The indication so far is very good and we are on track. I’m positive we will be able to deliver.”
Greece will start selling its Treasury bills on a monthly basis from this month, instead of offering them quarterly, to keep regular market access. The debt office will focus on three- month and six-month bills rather than 52-month bills, Christodoulou said.
“There is no point paying up in terms of yields to access 12-month money when long-term financing is provided by the package,” he said. “We feel it’s not productive to be absent for two or three months and then return to the market to raise a big amount.”
State financing needs are fully covered by loans under the plan agreed on with the EU and IMF, and the government is able to roll over its “relatively small stock of T-bills,” Greece’s Finance Ministry said on Aug. 24.
