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Hopeful signs in Greek debt auctions
By Paul Day and George Georgiopoulos
MADRID/ATHENS, Feb 15 (Reuters) - Borrowing costs for Spain
and Greece fell on Tuesday at treasury bill sales, a sign of
cautious optimism that Europe will eventually deal with its debt
crisis despite policymakers' slow progress towards new measures.
The yield on Spain's 12- and 18-month bills fell as much as
50 basis points compared to auctions in January, a mark of
broadly better market sentiment over the past month and a
positive reaction to efforts to sort out its savings banks.
But the premium demanded by investors to hold Greek over
German debt widened to 860 basis points, 26 bps on the day, as
uncertainty continued to plague the southern euro zone economies
struggling most with high debt.
Poor performance by a newly-launched Portuguese benchmark
last week also pushed the country's 10-year yield to a euro-era
high and the market looked unimpressed by an agreement by
finance ministers to make the euro zone's new rescue fund
larger.
Details of the fund won't be revealed until a meeting of
leaders in late March and the accord on Monday does little to
advance talks, economists said. But hope for a deal in the long
term was tempting investors back to the high yielding economies.
"For the first time (Greece has) a yield below 4 percent
with a higher cover ratio. The yield came out slightly better
than expected," said Costas Boukas, head of asset management at
Beta Securities.
"The market is looking forward to the EU summit in March.
There is positive sentiment and expectations for a solution to
the debt crisis from EU authorities," he said.
In a previous sale of 3-month T-bills on Jan. 18 Greece paid
a yield of 4.1 percent. Most of the issue was picked up by
foreign investors.
Greece switched to monthly issues of short-term government
paper from quarterly sales last September, seeking to improve
cash management as it struggles to emerge from its debt crisis.
By Paul Day and George Georgiopoulos
MADRID/ATHENS, Feb 15 (Reuters) - Borrowing costs for Spain
and Greece fell on Tuesday at treasury bill sales, a sign of
cautious optimism that Europe will eventually deal with its debt
crisis despite policymakers' slow progress towards new measures.
The yield on Spain's 12- and 18-month bills fell as much as
50 basis points compared to auctions in January, a mark of
broadly better market sentiment over the past month and a
positive reaction to efforts to sort out its savings banks.
But the premium demanded by investors to hold Greek over
German debt widened to 860 basis points, 26 bps on the day, as
uncertainty continued to plague the southern euro zone economies
struggling most with high debt.
Poor performance by a newly-launched Portuguese benchmark
last week also pushed the country's 10-year yield to a euro-era
high and the market looked unimpressed by an agreement by
finance ministers to make the euro zone's new rescue fund
larger.
Details of the fund won't be revealed until a meeting of
leaders in late March and the accord on Monday does little to
advance talks, economists said. But hope for a deal in the long
term was tempting investors back to the high yielding economies.
"For the first time (Greece has) a yield below 4 percent
with a higher cover ratio. The yield came out slightly better
than expected," said Costas Boukas, head of asset management at
Beta Securities.
"The market is looking forward to the EU summit in March.
There is positive sentiment and expectations for a solution to
the debt crisis from EU authorities," he said.
In a previous sale of 3-month T-bills on Jan. 18 Greece paid
a yield of 4.1 percent. Most of the issue was picked up by
foreign investors.
Greece switched to monthly issues of short-term government
paper from quarterly sales last September, seeking to improve
cash management as it struggles to emerge from its debt crisis.
