Yields are likely to dip marginally at a Greek auction of six-month T-bills on Tuesday, dealers said on Monday, reflecting better sentiment and expectations the small 300 million euro issue will be comfortably absorbed. The issue follows some easing in the
Greek yield curve in anticipation EU authorities will agree a comprehensive solution to the debt crisis by March.Greek bond yield spreads over German bunds have fallen more than 50 basis points in the last two weeks to below 800 basis points. "It's a small issue and should sell well with the yield easing to around 4.8 percent," said Theodore Krintas, head of wealth management at Attica Bank. Athens sold six-month T-bills in January at 4.9 percent. The Greek debt agency (PDMA) is set to auction 26-week treasury bills on Tuesday as part of its monthly short-term debt sales. With no maturities of six-month T-bills this month, PDMA needs to roll over only 480 million euros of three-month paper at the following auction on Feb. 18. Greece switched to monthly issues of short-term debt from quarterly sales in September last year to improve its cash management as it struggles to emerge from a debt crisis that forced it to seek a 110 billion euro bailout from the European Union and International Monetary Fund last May. "The nearest maturity on the curve, July 2011, is priced to yield 5.0-5.05 percent but I think the yield in tomorrow's auction will ease below 4.9 percent," said a bond dealer at a large Greek bank who did not want to be naned. Peripheral bond yield spreads over German bonds were slightly wider on Monday, but there was no sign that a Portuguese syndication would derail a recent positive performance by the euro zone's lower-rated sovereigns. The Greek 10-year yield spread hovered around 784 bps on Monday. FOREIGN BUYERS In January, Greece sold 1.95 billion euros of six-month T-bills at 4.9 percent, about the rate it pays on its EU/IMF bailout loans and up from 4.82 percent in a November sale. About 37 percent of the January issue went to foreign buyers. Successful issues of short-term debt could set the stage for Athens to return to the bond market after fears of it defaulting on its huge public debt effectively shut it out from the longer debt market. For further details please click on. A Greek finance ministry official said on Monday that Athens was confident it had made enough progress on its fiscal consolidation plan to get the green light this week for a fourth tranche of the EU/IMF aid. Greece's public debt stands at 145 percent of gross domestic product and is projected to peak at 158 percent in 2013, according to EU and IMF forecasts.
by George Georgiopoulos
Editing by Susan Fenton
source: Reuters
