Greece

Greek lawmakers approved a restructuring plan for Larco late on Wednesday which Greece called a last attempt to save Europe’s biggest nickel producer, Reuters reported. The European Commission said in November it was taking Greece to the European Court of Justice (ECJ) over its failure to recover 135.8 million euros ($147.63 million) of illegal state aid to Larco which is struggling under heavy debt.

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Greece’s spectacular bond rally reached another landmark on Wednesday as the country’s 10-year yield dropped below 1 per cent for the first time, the Financial Times reported. Greek borrowing costs have tumbled to record lows this year in defiance of its “junk” credit rating, as investors pile into corners of the eurozone debt market that offer a positive yield. The recent drop in borrowing costs caps a dramatic turnround since the height of the eurozone debt crisis when the country’s 10-year yield spiked above 30 per cent, effectively locking it out of the market.

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Fitch Ratings raised Greece’s sovereign credit rating by one notch, paving the way for the government to sell more debt in the coming days, Bloomberg News reported. The Mediterranean country’s long-term foreign currency debt was upgraded to BB with a positive outlook from BB-. While Greece hasn’t enjoyed such a high rating by Fitch since the country entered the bailout era in 2010, it’s still two levels below investment grade, highlighting that the Greek government has to do more so as to secure an exit from junk status.

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After almost a decade, the world’s lender of last resort is ready to leave Greece for good, Bloomberg News reported. For a while there, Europe’s most indebted nation had everyone worried this Mediterranean holiday destination was going to bring on the collapse of the euro. Its ups and downs had the market gyrating. Then came the biggest bailout in global financial history. The International Monetary Fund led the effort to save Greece from itself. At the beginning of the 10-year crisis in Greece, the Washington-based institution had asked for a restructuring of country’s debt.

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After a decade-long debt crisis that made Greece a bond-market pariah, the country now enjoys the luxury of having no financing needs for 2020. Yet the government’s 2020 budget shows it still plans to sell new debt, Bloomberg News reported. Despite a cash buffer of some 32 billion euros ($35.6 billion) left over from the country’s bailout program, Greece wants to maintain the good momentum of 2019 after yields hit record low levels in October.

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Greek Bonds Buck Eurozone Trend

Eurozone bond yields rose on Wednesday after more upbeat European economic data helped offset some of the anxiety about a new Brexit cliff-edge that boosted demand for safe-haven government debt a day earlier, The Trust Project reported. Investors have been dumping eurozone government debt for riskier assets in recent weeks on signs the economy is rebounding and in anticipation of an agreement on the first phase of a trade deal between Washington and Beijing. Read more

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Greek jeweler Folli Follie has reached a preliminary deal with some of its creditors over a rescue plan for the company, it said late on Tuesday, Reuters reported. Folli has struggled to pay suppliers and workers and keep its business going since a hedge fund report in May last year questioned its accounting. Its shares have since been suspended, and the company has been fined by Greece’s securities watchdog. The firm published delayed audited financial statements for 2017 in July that showed it had overstated annual revenue by more than 1 billion euros ($1.1 billion).

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Alpha Bank on Tuesday reported lower third-quarter profits after higher bad debt provisions and said it would launch a big securitisation of soured loans to clean up its balance sheet, Reuters reported. Alpha, 11% owned by the country’s bank rescue fund HFSF, reported net profit from continuing operations of 4.8 million euros after net earnings of 59.4 million euros in the second quarter. Provisions for bad debt rose 6.3% quarter-on-quarter to 261.5 million euros.

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Greece’s Eurobank said on Thursday it was selling two real estate portfolios worth a combined 84 million euros (£72 million) to Brook Lane Capital and plans to put a third portfolio up for sale, Reuters reported. Eurobank, which is 2.4% owned by Greece’s HFSF bank rescue fund after being bailed out during the country’s debt crisis, repossessed most of the properties, residential and commercial, after loan defaults. The bank, Greece’s third largest lender by assets, said it wanted to focus on other property assets on its books.

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Even in a record-breaking year for global bond markets, Greece stands out. As recently as 2012, investors decided the country’s debt load had spiralled out of control and refused to lend to Athens at any cost, the Financial Times reported. Now, after a rally that has bewildered many observers, investors pay Greece to borrow on short-term debt. Ten-year bond yields trade at 1.2 per cent — well below the equivalent borrowing cost for the US government.

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