Citi says Greek bond yield remains prohibitive

With its benchmark bond yield stuck between 4.3 and 4.4 percent, Greece's cost of borrowing continues to be high, Citigroup warned in a note to clients, following statements by Finance Minister Euclid Tsakalotos earlier this week about drawing 7 billion euros from the markets.

The US company commented that as the Greek economy and its fiscal performance are slowly improving, there is a "generous cash buffer" that makes sense for Greece to use to pay off some of its existing "expensive" debt. Tsakalotos earlier this week said that Athens may use its 26-billion-euro cash buffer to buy back part of the loans of the International Monetary Fund and/or the European Central Bank.

However, Citi also stressed that the cost of financing from the markets remains high for Greece, with the 10-year bond yield adding three basis points on Thursday to 4.33 percent, so this country...