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Greek Tuesday Treasury Bill Auction Seen At Shrinking Yields
ATHENS (Dow Jones)--Greece's Treasury bill auction on Tuesday is expected to produce a shrinkage in yields with demand remaining robust, especially from foreign investors, bond analysts said.
The Public Debt Management Agency plans to auction EUR900 million in 26-week T-Bills Oct. 12. The previous six-month T-Bill produced a yield of 4.82%.
"I think the yield is likely to come in at comparatively low levels like 4.4%, significantly below the previously 26-week auction of 4.82%, because foreign investors' demand will add to heavy local bank demand," said Jen Peter Sorensen, chief analyst at Danske Bank.
Yields on short-term T-Bill auctions in the last few weeks have also been tightening for other euro-periphery countries like Portugal and even Ireland which has serious problems with its local banking sector and deficits.
"Given that Greek 10-year spreads over the German benchmark bund have been falling about 200 basis points in the last two months and the fact there is no risk of solvency or insufficient cash over the six-month time frame, I expect there will be no problem with the issue and it will be healthily oversubscribed," Sorensen adds.
In September, Greece returned to monthly T-Bill auctions from previous quarterly issues. But it has refrained from issuing 52-week bills fearing that the yield could be above 5%, the higher rate that it borrows at from the EUR110 billion bailout package from the International Monetary Fund and the European Union.
The debt-strapped Mediterranean country hopes to resume issuing bonds, which are longer-term paper in 2011 and will be a clearer test of market appetite and confidence. Greece has to return to borrowing from international markets because the bailout cash finishes in early 2012.
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ATHENS (Dow Jones)--Greece's Treasury bill auction on Tuesday is expected to produce a shrinkage in yields with demand remaining robust, especially from foreign investors, bond analysts said.
The Public Debt Management Agency plans to auction EUR900 million in 26-week T-Bills Oct. 12. The previous six-month T-Bill produced a yield of 4.82%.
"I think the yield is likely to come in at comparatively low levels like 4.4%, significantly below the previously 26-week auction of 4.82%, because foreign investors' demand will add to heavy local bank demand," said Jen Peter Sorensen, chief analyst at Danske Bank.
Yields on short-term T-Bill auctions in the last few weeks have also been tightening for other euro-periphery countries like Portugal and even Ireland which has serious problems with its local banking sector and deficits.
"Given that Greek 10-year spreads over the German benchmark bund have been falling about 200 basis points in the last two months and the fact there is no risk of solvency or insufficient cash over the six-month time frame, I expect there will be no problem with the issue and it will be healthily oversubscribed," Sorensen adds.
In September, Greece returned to monthly T-Bill auctions from previous quarterly issues. But it has refrained from issuing 52-week bills fearing that the yield could be above 5%, the higher rate that it borrows at from the EUR110 billion bailout package from the International Monetary Fund and the European Union.
The debt-strapped Mediterranean country hopes to resume issuing bonds, which are longer-term paper in 2011 and will be a clearer test of market appetite and confidence. Greece has to return to borrowing from international markets because the bailout cash finishes in early 2012.
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