"The biggest news in the sovereign debt world this week
has come from Greece, which managed to sell some €3 billion in new 5-year
bonds at a yield of just 4.95%. This is not what you might expect, given the macroeconomic situation:
Greece’s debt currently stands at
about 320 billion euros, or 175 percent of GDP. It is rated nine notches below
investment grade at Caa3 by Moody’s. Standard and Poor’s and Fitch rank Greece
six notches below investment grade at B-.
So,
how does one explain investors’ appetite to buy this debt at such low yields?"
