Irish/German bond yield spread above 500 bps
LONDON, Nov 3 (Reuters) -The premium investors demand to hold Irish bonds rather than benchmark German Bunds rose above 500 basis points for the first time on Wednesday as peripherals remained under pressure on the implications of a possible new permanent debt restructuring mechanism.
The Irish/German 10-year bond yield spread was 11 basis points wider at 508 basis points. Portuguese bonds were also underperforming with the yield spread five basis points wider at 391 basis points.
The latest sharp peripheral sell-off began on Friday after European Union proposals on sovereign debt restructuring reminded investors of the possibility of a government restructuring and raised the possibility of bondholders having to share the burden in a default situation [ID:nN01141530]