Bond

Greece plans to reopen its recent three- and five-year bond issues in the next two weeks, to top them up by as much as 1.5 billion euros, accepting treasury bills as payment instead of cash, a senior government source told Reuters on Monday.

The debt exchange is aimed at improving the functioning of the secondary bond market, boosting liquidity and tightening spreads.

By Lukanyo Mnyanda

European government bonds surged, pushing yields from Germany to Spain down to records, after European Central Bank President Mario Draghi gave his strongest signal yet officials are moving closer to quantitative easing.

International investors are not optimistic they will get their money from Bulgaria’s Corpbank after the troubled lender defaulted on a bond payment last week, the FT has said.

The risk holders of Corpbank’s dollar-denominated bond will pursue legal action against the troubled Bulgarian lender and the state has increased, Reuters has reported.

According to unnamed bondholder sources quoted by Reuters, Corporate Commercial Bank, or KTB, failed to make the final payment on the bond that matured last Friday.

Bulgaria will decide the fate of troubled Corporate Commercial Bank (KTB) only after the results of an audit become known in October, the country’s President has told Reuters.

Rosen Plevneliev said that for the moment “no politician and no government can do anything but just wait to see the numbers."

The caretaker government of law professor Georgi Bliznashki appointed on Tuesday “inherits raft of problems to sort out”, Reuters noted in its coverage of the news.

Holders of USD bonds at Bulgaria's Corporate Commercial Bank (KTB) are planning to sue the government if the bond defaults and KTB is tipped into insolvency, reports Reuters.

Argentina blames the United States for the legal battle that forced it to miss a debt payment and, despite ratings agencies’ declarations to the contrary, denied being in default.

Greek bond yields slipped on Friday, slightly outperforming other lower-rated euro zone bonds as investors anticipated a credit ratings upgrade from Moody's later in the day.

Moody's has an extremely speculative Caa3 rating on Greece, the worst in the euro zone. It is scheduled to review the rating on Friday. Any announcement will come after the market closes.

By Anchalee Worrachate

Euro-area government bonds were set for their longest monthly winning streak in nine years after weak data from retail sales to factory output signaled European Central Bank efforts to revive the economy are not yet finished.