Greek bond yields remain highest in Eurozone

Greece’s new bonds, issued following last week’s debt swap deal, have begun trading at high yields, suggesting that investors do not have confidence in the current rescue deal.

Greece issued 20 new bonds to its investors on Monday, with early pricing showing bid yields ranged between 19.4 percent on the shortest duration debt maturing in 2023 and 14.3 percent on the 2042 bond.

Greece remains by far the highest yielding country in the eurozone with new 2023 bond carrying a 550 basis point yield premium over the closest comparable issues, from Portugal.

The private sector debt swap lopped about €100bn euros off Greece’s gargantuan debts but still leaves Athens as the euro zone’s most indebted country and does not preclude a messier default or even a euro exit further down the line.

On Friday the International Swaps and Derivatives Association concluded that the Greek debt swap constituted a credit event and would trigger payment on credit default swap (CDS) insurance contracts.