On the theme of countries piling debt upon debt upon debt, which Keith “affectionately” refers to as “kicking the can further down the road”, today Greece issued its first debt offering since the EU and IMF agreed on 3/25 to “safeguard financial stability” in Greece. The €5 Billion 7-year Greek bond yielded 6%, or 334bps above 7-year German bunds, the proceeds of which will be used to meet (or roll over) nearing debt payments, including €12 Billion in April and €8.5 Billion in May.
As we noted in our post from Friday titled “Politics vs. Pragmatism”, while Greece may have received the red-cross jersey late last week, sovereign debt issues among the other PIIGS remain at large. With some €53 Billion of Greek debt coming due this year and no clear policy from the Europeans to address bailout/default issues of its member states, we’d expect markets to continue to shake. Stay tuned.