Greek bond yields rise to unprecedented levels

Financial Times
September 13, 2011

Greek bond markets have gone off the scale. As investor concerns over a potential debt default by Athens mount, the country’s debt has entered territory previously uncharted by a European sovereign.

Yields have risen by 150 percentage points on some bonds in the space of three months and volumes have slumped, almost to nothing on some days.

A trader at one big bank said: “Yield levels are unprecedented. Even other severely distressed sovereigns are not paying anything near the yield levels of Greece.”

Another trader added: “There are barely any trades on some days, so we have to make up the prices. As a primary dealer, we are under obligation to make a market and at least offer a price that we would buy and sell Greek debt.”

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