Greek bonds plunged, driving yields on the nation’s two- and 10-year securities to records, as Prime Minister George Papandreou’s failure to win parliamentary support for more austerity fueled speculation of a default.
Greek 10-year bonds fell for the second consecutive week, driving the yield difference, or spread, between the securities and similar-maturity German bunds to an all-time high. The debt rallied yesterday after German Chancellor Angela Merkel retreated from German demands that bondholders be forced to bear a “substantial” share of a new rescue for Greece. Standard & Poor’s cut Greece’s credit rating to CCC from B on June 13.
businessweek
