GREECE YIELD UNATTRACTIVE EVEN OVER 7%
Greece's dollar bonds would be unappealing even if they returned more than seven per cent, according to global strategic adviser at Pacific Investment Management Company, Mr. Richard Clarida.
'I don't think that it would be an attractive enough yield,' said Clarida on Thursday, in a Bloomberg Radio interview with Tom Keene.
Greece is'sort of like the Titanic. Eighteen things went wrong, and when they go wrong at once it's problematic,' said Clarida, whose Newport Beach, California-based firm runs the world's largest mutual fund.
Greece plans to sell a global bond in dollars in the next two months as part of a plan to raise $15.4bn in funding by the end of May after investors lost money on its most recent sale.
The nation needs to borrow a total of ¤32bn euros this year, Director General of the Public Debt Management, Mr. Petros Christodoulou.
Agency, said in a Bloomberg Television interview on March 31. He declined to say how big the dollar issue might be.
'We're talking now about what the market sees as a solvency issue,' Clarida said. Greece is struggling to cut its budget deficit, the largest in Europe, from 12.9 per cent of gross domestic product last year, prompting investors to dump Greek assets.
Finance Minister George Papaconstantinou told ANT1 television that Greece doesn't need additional austerity measures after the European Union and the International Monetary Fund agreed to terms for an emergency support package.
'The size of the packages being discussed now, though big by IMF standards, may not be enough for Greek refinancing needs,' Clarida said. 'Compared to the amount of debt Greece has to roll over, it's not a lot of money.'
The IMF may provide ¤15bn to ¤20bn, wrote Barclays Plc economists, Mr. Christian Keller in London and Mr. Laurence Boone in Paris in a note to investors, citing the 'recent pattern of IMF lending in European Union programs.'
A joint rescue package for Greece by euro-region countries and the IMF may total at least ¤40bn over three years, the Barclays economists wrote.
European Central Bank President Jean-Claude Trichet said governments shouldn't subsidize any loans to Greece as part of a financial package to the country.
'We are very attached to the idea that there shouldn't be a subsidy element,' Trichet told Bloomberg Television in an interview in Frankfurt. 'Any government which would lend to Greece would have to make sure that it is not lending to Greece at a loss.'
The yield on the 10-year Greek bond rose 0.26 percentage point to 7.42 per cent, increasing the spread with benchmark German bunds to the widest since the euro's debut in 1999. Greece's ASE Index of stocks slid as much as 5.2 per cent, the most in almost four months, and the cost of insuring against a default by the nation climbed to a record.