New Greek bonds issued in a historic debt writedown to erase nearly a third of of Greece's debt slumped in value on Monday, the same day the bond swap operation was completed.
Earlier in the day, Greece's debt management agency said the exchange with private investors for 177.3 billion euros ($232 million) in bonds issued under Greek law was completed.
But traders showed little enthusiasm for the new instruments, with the bonds already trading between 71 percent and 75 percent lower than face value on the secondary markets.
New Greek bonds with 30-year maturities issued with yields of 3.65 percent were trading Monday at a yield of 13.57 percent, meaning investors were looking for a significant risk premium on their investment.
"This corresponds to our expectations," said Ioannis Sokos, bond strategist at BNP Paribas, while adding that the yield was near Portugal's which was 13.11 percent in afternoon trading on Monday.
Sokos noted that yields on Portuguese and Greek debt were higher for the short-term in a phenomenon rarely seen on the bond market.
"Greek risk is primarily seen in the short-term," Sokos said.
In the historic swap, Greek debt holders received new bonds with a face value equivalent to 31.5 percent of the face amount of the debt exchanged, plus 24-month notes from the European Financial Stability Facility, the eurozone's current rescue fund.
Holders also received detachable securities linked to Greek output with a notional amount equal to the face amount of the new bonds.
Another exchange for bonds issued under international law is to take place on April 11.
The Greek bond swap is intended to avert default by Greece when debt falls due on March 20 and is a key part of a eurozone-IMF rescue to enable the country to rebuild its economy.
A broad majority of private holders of Greek debt on Friday accepted to lose 53.5 percent of the face value on their 206 billion euros ($273 billion) in holdings.
Collective action clauses recently included into Greek law enabled Athens to force compliance on additional bondholders, pushing the overall participation rate to 95.7 percent.
The exchange reduces the near and midterm debt owed by Greece by over 100 billion euros. Greece had a total public debt of over 350 billion euros.
Ratings firm Moody's declared Greece in default on its debt and a key derivatives group branded the deal a "credit event", but Athens argues that repayment of default securities will be negligible.
yahoo.com
Earlier in the day, Greece's debt management agency said the exchange with private investors for 177.3 billion euros ($232 million) in bonds issued under Greek law was completed.
But traders showed little enthusiasm for the new instruments, with the bonds already trading between 71 percent and 75 percent lower than face value on the secondary markets.
New Greek bonds with 30-year maturities issued with yields of 3.65 percent were trading Monday at a yield of 13.57 percent, meaning investors were looking for a significant risk premium on their investment.
"This corresponds to our expectations," said Ioannis Sokos, bond strategist at BNP Paribas, while adding that the yield was near Portugal's which was 13.11 percent in afternoon trading on Monday.
Sokos noted that yields on Portuguese and Greek debt were higher for the short-term in a phenomenon rarely seen on the bond market.
"Greek risk is primarily seen in the short-term," Sokos said.
In the historic swap, Greek debt holders received new bonds with a face value equivalent to 31.5 percent of the face amount of the debt exchanged, plus 24-month notes from the European Financial Stability Facility, the eurozone's current rescue fund.
Holders also received detachable securities linked to Greek output with a notional amount equal to the face amount of the new bonds.
Another exchange for bonds issued under international law is to take place on April 11.
The Greek bond swap is intended to avert default by Greece when debt falls due on March 20 and is a key part of a eurozone-IMF rescue to enable the country to rebuild its economy.
A broad majority of private holders of Greek debt on Friday accepted to lose 53.5 percent of the face value on their 206 billion euros ($273 billion) in holdings.
Collective action clauses recently included into Greek law enabled Athens to force compliance on additional bondholders, pushing the overall participation rate to 95.7 percent.
The exchange reduces the near and midterm debt owed by Greece by over 100 billion euros. Greece had a total public debt of over 350 billion euros.
Ratings firm Moody's declared Greece in default on its debt and a key derivatives group branded the deal a "credit event", but Athens argues that repayment of default securities will be negligible.
yahoo.com
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