Goldman Sachs said that Portugal is likely to be the last euro region
country to seek an international bailout, while a “voluntary” extension of the maturity profile of Greek debt is likely, according to Bloomberg.“We do not expect any other EMU sovereign to be in need of financial assistance,” said Francesco Garzarelli, Goldman Sachs’s London-based chief interest-rate strategist.
While Goldman doesn’t expect any “principal impairment” for bonds sold by Ireland and Portugal, a “voluntary” extension of the maturity profile of Greek debt is likely, he added.
Goldman Sachs expects half of Portugal’s funding to come from European funds and the rest to come from the International Monetary Fund. The EU may use the opportunity to align the bailout lending rates of Portugal and Ireland with those of Greece, said the news agency.
Additionally, the bonds of outer peripheral countries “are likely to remain volatile and less liquid as they are removed from bond indices and fixed-income mandates,” Garzarelli said.
Spreads between the yields of Italy, Spain, Belgium and those of AAA- rated economies such as Germany “will slowly compress,” he stated.
