Greece Government Bond Market Panic Crash, Yields Hit 18%, Portugal Next?

Interest-Rates / Global Debt Crisis
Apr 27, 2010 - 01:53 PM

By: Mike_Shedlock

It did not take too long for contagion to spread (one day), smack in the face of EU statements that contagion was no risk. Why the EU would put themselves in a position to look so foolish is beyond me. Here is a series of articles to consider.

S&P Cuts Greek Debt Rating to Junk

Greek Two-Year Note Yield Climbs to More Than 17% on S&P Cut http://www.bloomberg.com/apps/news?pid= ... srnA&pos=2

Greek two-year government note yields surged to more than 17 percent after Standard & Poor’s cut the nation’s credit rating three levels to BB+, or junk.

The two-year yield has since hit 18 percent.

Restructuring Would Cause 50-70 Percent Losses

Greek Debt Cut to Junk at S&P, Further Downgrades Possible http://www.bloomberg.com/apps/news?pid= ... WkZM&pos=2

Greece had its credit rating cut to junk by Standard and Poor’s and forecast investors would be paid no more than half their initial outlay in the event of any restructuring of debt.

S&P lowered its long- and short-term sovereign credit ratings on Greece to BB+ and B, respectively, from BBB+ and A-2. The outlook is negative.

“We assigned a recovery rating of ‘4’ to Greece’s debt issues, indicating our expectation of ‘‘average’’ (30%-50%) recovery for debtholders in the event of a debt restructuring or payment default,â€