The Greece sell tickets as the performance of two years at the head of 20%: Euro credit

April 19, 2011, 12: 52 pm EDT by Maria Petrakis and Natalie weeks

April 19 (Bloomberg) — plans of Greece to sell 1.25 billion euros ($1.78 billion) of the 13-week Treasury Bills today that the culture of speculation of the country will have to restructure its debt pushed bond yields to the euro-ère files.

Performance of the obligations of the Greece two years exceeded 20% yesterday, as the official denials that the nation was preparing a restructuring failed to convince investors. The yield on the 10-year debt is passed more than 300 since February 15 basis points, when the Greece sold last invoices from 13 weeks to 3.85% yield. "" Actions of market prices suggest think, there is no smoke without fire ", said Richard McGuire, a senior strategist for fixed income at Rabobank International in London. "Greece keep will rolling on bills if the cost can therefore be increased."Comments from German Chancellor Wolfgang Sch?uble on April 14 that the Greece may need to restructure its debt sent bonds plummeting peripheral Europe. The slide reversed the gains of last week triggered by optimism that contagion from the crisis of the debt of the region was contained with application of Portugal did rescue plan it said that his comments were misinterpretedAlthough German officials continue to talk of restructuring as recently as yesterday. "The big question is: the Greece will make the summer without buckling and to have to find ways of restructuring of its debt,"Otto Fricke, spokesman of the parliamentary budget for Chancellor Angela Merkel free Democrat coalition partner, said. "Not good signs. "Exit MapGreek Government spokesman, that George Petalotis yesterday"categorically"denies reports in the newspapers, including Eleftherotypia, the Greece has asked the Monetary Fund International and the Union European, who provided the country with a package of 110 billion - euros of loansto extend the deadlines of the debt of the country.Budget measures further and State-asset sales announced April 15, namely EUR 76 billion, are "the card for the output of the country of the crisis", said Petalotis.Ses fact comments echo those of Finance Minister George Papaconstantinou, who said at a meeting of the IMF in Washington April 16 and April 17 that restructuring is "simply not on"cards."". The Greece also found support from the IMF Director General Dominique Strauss-Kahn and Christine Lagarde, French Finance Minister, who denied that these steps have been in the works.Default InsuranceInvestors remains skeptical, and demand for investors additional yield to Greek debt of 10 years instead of the German equivalent securities yesterday exceeded 1,100 points of base for the first time since before the debut of the euro in 1999. Greek sovereign debt insurance costs jumped 101 basis points to 1,256 record, according to the price of CMA for credit - default swaps. That indicates there is a likelihood of 65.8% of the default within five years.Mounting concerns about the restructuring costs of borrowing for the Spain a survey auction yesterday. The Treasury sold 12 months bills EUR 3.5 billion in an average yield of 2.77%, compared to 2,128% at the previous auction on March 15. "" Given the current environment and the flow of new negative from the periphery, some volatility in the auction and a result lower than normal are not a big surprise, "Chiara Cremonesi, a strategist of income fixed at UniCreditwritten in London yesterday.The Greece sold only invoices for 26 weeks and 13 weeks since to get the bailout of the EU in May 2010. The last note of 52 weeks was sold on April 13, 2010, 10 days before Prime Minister George Papandreou has called for assistance and began talks with the EU and the IMF. This question has been sold to 4.85%. Greece last week has raised EUR 2 billion of 26-week bills that have been priced yield 4.8% of the sale.Need to refinance refinancing NeedsGreece this year of EUR 58 billion are covered by the EU - IMF loan plan. The great challenge comes next year. Under the aid scheme, the Greece is due to regain access to markets and refinancing at least three quarters of its maturation in the medium and long term debt, and then fully rollovers of debt of the summer of the yields of 10 years of 2013.Greek funds have increased by almost 200 basis points this year and attracted approximately 400 basis points since Papandreou asked the rescue plan to bring down borrowing costs. The jump in yields has even after the leaders of the EU and the IMF agreed to extend the deadlines and reduce the rate of interest on loans.Under the changes made last month to the Fund for relief of the entire region, Greece may, "as" an exception, sell bonds directly to the Fund to rescue the region, the installation of European financial stability, in 2012If the nation is not able to tap markets next year. This possibility also exists for the sales to the Fund after 2012, so long the Greece remains in an assistance program.Advantage of the restructuring of the pure and simple of DoubtAn debt would reduce the net present value of debt is "a medium-term event, not an event in the short term," Deutsche Bank economists led by Thomas Mayer wrote a note on April 15 to customers. "As long as the Greek Government and the people remains constructive on the provision of fiscal consolidation, privatization and structural reforms, the EU and the IMF have an interest in giving them a benefit of the doubt,"wrote Mayer." "The most likely outcome is return of the Greece market in 2012 is back-order by the EFSF, in exchange for additional austerity."The IMF said in its report of March that the Greece debt was sustainable program, although major risks remained, including a so-called Bank contingent liabilities increase. This analysis said banking shock would push gross debt of more than 200 percent of the domestic product. Greek banks remain frozen markets and the challenges are mounting as the recession deepens, said the EU and the IMF.A debt restructuring "would have disastrous consequences for access to the Government and Greek to international financial markets firms, as well as a very negative effect on the assets of pension funds, banks and individuals," Bank of Greece Governor George Provopouloswhich is also a member of the Council of the European Central Bank, said in a speech yesterday in Athens.

-With the help of Anchalee Worrachate in London and Marcus delegation to Athens. Editors: Andrew Davis, Tim Quinson

To contact the reporter on this story: Maria Petrakis at mpetrakis@bloomberg.net;

To contact the editor responsible for this story: Angela Cullen at acullen8@bloomberg.net

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