Loan Sharks Rejoice – Greece 2-Year Notes at 20% !
Andrew Horowitz
The Disciplined Investor
April 19, 2011
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Investors in Greece celebrated today. They were awfully happy that their governmental was able to go to the open market and float 2-year notes at a yield of 20%. What a deal!!!!!
OPA!
The news was simple from Briefing.com: Greece conducted a successful 3-month Bill auction today, selling a greater-than-expected 1.625 bln euro at a yield of 4.1%, only 25 bps above the prior sale despite fears of a restructuring. With that, Greece’s ASE is leading European markets, up 1.8%.
OPA!
The cost to insure the debt of Greece from default has risen to a record high. So, either their are some very happy loan-sharks out there or there is simply no fear that bondholders will have any downside risk as long as Germany is there to support Greece.
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April 20th, 2011 at 2:29 pm
4.1% is an annualized yield for these 3 month Greek T-Bills. Where does the 20% come from? They are zero coupon and were issued at 99.019 and mature 7/22/11 at par (unless restructured obviously).
April 20th, 2011 at 2:32 pm
Nevermind, I looked at the curve at the 4.6% of 5/20/13 is 72.87 bid which is over 20%. Definitely could have included that in the post.