Greek loan maturity extension to be discussed

A report by Bloomberg noting that “the next handout to Greece may include extending the maturity on rescue loans to 50 years and cutting the interest rate on some previous aid by 50 basis points,” is causing a stir, with first signs on Greek bond yields.

The article notes this plan will be considered in late spring or early summer, and may include an aid package worth between 13 and 15 billion euros. The measures seem to be under discussion, but with the proviso that Greece meets its commitments, as Dutch Finance Minister Jeroen Dijsselbloem is quoted as saying. However this is such an oft repeated “recording” from the Dutch minister that it's beginning to sound like the proverbial boy who cried wolf.

Meanwhile the news from Bloomberg led to a sharp drop of Greek bond yields on Wednesday, according to Reuters, which notes that they fell by 60 points this week, “almost reversing their recent rise to 2014 peaks, spurred by contagion,”

Another immediate result was that Greek 10-year bonds rallied, with yields falling 37 basis points to 7.92 percent Wednesday afternoon, signifying the biggest drop in seven months, while the Athens Stock Exchange Index rose by 3.3 percent.