Friday, April 22, 2011

Current Greek Bond Drama Portends Restructuring

by Pater Tenebrarum

Seeking Alpha

April 22, 2011

As readers are probably aware, bond yields in the euro area periphery continue to blow out in parabolic fashion. Below is the action in Greece's 2 year note yield of yesterday and today:

Wednesday's move in the Greek 2 year note yield – closing at 22.02% for the first time, in yet another huge single day move.

Today another 95 basis points were added, with the Greek 2 year note closing at a yield of 22.97% – click for higher resolution.

This doesn't really alter what we have already known for some time now: the markets are telling us that a Greek debt restructuring is on its way. What form it will precisely take remains to be seen.

What may be of interest is who has the most exposure to Greek debt. Interestingly, Germany's exposure to Greece specifically is relatively small, at least compared to that of the two biggest creditors to Greece, France and Switzerland.


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