Greek, Irish, Portuguese bonds slump

Greek bonds slumped, pushing yields up by the most in almost a year, as the cost to insure the securities against default jumped to an all-time high amid mounting concern it will have to restructure its debt burden, reports Bloomberg. Yields on two- and 10-year bonds from Greece, Ireland and Portugal all rose to euro-era records this week. Lars Feld, a member of German Chancellor Angela Merkel's council of economic advisers, said on April 20 that Greek debt restructuring is probable. German bunds gained after Standard & Poor's put a "negative" outlook on the U.S.'s AAA credit rating, sparking demand for an alternative to Treasuries. "The key driver behind this new sell-off is the ongoing speculation about possible Greek restructuring," said Michael Leister, a fixed-income analyst at WestLB AG in Dusseldorf, Germany. Greece's two-year yields rose 450 basis points to a euro- era record 23.32 percent as of 4:23 p.m. yesterday in London, the biggest increase since the week ending May 7 last year. The nation's 10-year bond yields posted a 110 basis-point gain to 14.93 per cent. Portuguese 10-year government bond yields rose to a euro-era record of 9.43 per cent. The yield on the nation's two-year note climbed 165 basis points to a record 10.85 per cent. Ireland's two-year note yields rose 254 basis points in the week, reaching an all-time high of 10.77 per cent, while its 10-year bond reached a record 10.48 per cent.