* Greece gets more time, but aid delayed
* Bild report read as Germany wanting deal to be done
* Athens sells T-bills to roll over expiring debt
By Marius Zaharia
LONDON, Nov 13 German Bunds pared gains on
Tuesday after a media report that Germany wanted to bundle three
Greek aid tranches into a single payment -- a detail some
investors interpreted as a sign that a deal for Athens was near.
On Monday, international lenders stopped short of disbursing
Greece's next aid tranche under its bailout programme, clashing
over how long the country should be given to reduce its debt to
Asked about the report in Germany's Bild newspaper, a German
finance ministry spokeswoman said no decision had yet been made
on loan payments to Greece.
"The report made some Bund investors more confident that the
deal is close to being done," one trader said.
Bund futures were last 3 ticks higher on the day at
143.20, having earlier hit a two-month high of 143.48. Ten-year
yields were flat at 1.342 percent.
The lack of a fresh aid payment meant Athens had to roll
over short-term borrowing.
Greece sold just over 4 billion euros of one- and
three-month T-bills. Non-competitive bidding in the next two
days is expected to cover the 5 billion euros of debt maturing
on Nov. 16 and buy the country time as talks for new money go
The International Monetary Fund and the euro zone clashed
over a long-term target to bring Greece's debt down to 1.2 times
its economic output, a level considered sustainable.
The real sticking point behind the figure is that the IMF is
pushing for the euro zone to take losses on Greek debt --
something that the bloc's paymaster Germany, which holds
elections next year, says is illegal.
"The IMF is pushing for another debt restructuring ... The
main thing now is to find an agreement for the next tranche to
pay back the bills next month and this discussion hasn't
finished yet," ING rate strategist Alessandro Giansanti said.
Giansanti said 10-year German yields could fall towards
July's lows of 1.20 percent if weeks go by without an agreement.
Jean-Claude Juncker, the chairman of euro zone finance
ministers, said a further Eurogroup meeting would take place on
Nov. 20, while officials said more talks could be required the
following week to nail down a new deal.
The fact that Greece was given two extra years to meet one
budget target required by its bailout deal, however, showed the
lenders wanted the aid programme to continue, analysts said.
"There seems to be quite a big difference of opinion between
the IMF and euro zone finance ministers ... but our view is
still that Greece won't leave the euro zone," Rabobank rate
strategist Lyn Graham-Taylor said.
Strategists at Helaba Landesbank Hessen-Thueringen said that
if investors remained risk averse Bunds could target 144.37, the
Aug. 29 high. If the trend reversed, Bunds should find support
at Nov. 8's low of 142.57 or the 100-day moving average at
Investors were also watching U.S. lawmakers' efforts to
reach a deal on budget cuts and avoid automatic tax hikes and
spending reductions worth about $600 billion next year. The
so-called "fiscal cliff" could send the U.S. back into recession
and hurt the global economy.
"That is a big support for (Bunds)," another trader said.
"Greece and the U.S. are the main drivers at the moment."