January 22, 2018 / 10:30 AM / 3 months ago

Greek short-dated bond yields tumble after S&P lifts Greece's ratings

LONDON, Jan 22 (Reuters) - Greece’s short-dated government bond yields fell on Monday following a decision by S&P Global Ratings to upgrade Greece for the first time in two years.

S&P raised Greece’s credit ratings by one notch to ‘B’ after the close of markets on Friday, citing improvements in the finances and fiscal outlook for the debt-laden south-eastern European nation.

The ratings upgrade boosted sentiment towards a bond market that has benefited in recent weeks from expectations that Greece will exit its bailout programme this year.

Short-dated Greek government bond yields were down 6 basis points at 1.32 percent. Five-year Greek bond yields were down about 3 bps at 2.81 percent, while longer dated bond yields were slightly higher on the day.

“Certainly Greece has made a great deal of progress recently and risks are far lower,” said Jennifer McKeown, chief European economist at Capital Economics. “Given how much its debt costs have been pushed down, a ratings upgrade probably makes sense.” (Reporting by Dhara Ranasinghe; Editing by Abhinav Ramnarayan)

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