We were right primed this morning to award the Jean Genet Memorial Trophy (popularly know as the Ungreased Broomstick) to the first writer out of the box in 2011 with a death-of-the-euro/Spain-bailout story. Disappointingly, FT Alphaville was the only contestant.On the left is a screenshot (from Bloomberg) of today's Spain 10-year yield. That tumble at 5 AM NY time coincides with word getting out that BBVA's 1 billion euro covered bond issue was oversubscribed.
Given the new order attendant on Germany's insistence that sovereign bond holders share in the pain of a restructuring, one shouldn't expect the Spain 10 to yield under 4 percent any time soon. But spreads should tighten - at least in the short term.
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1 Comments:
If EU-country issued bonds in 2013 are going to include a collective action clause, does this mean that all bonds issued prior to that are going to effectively be more senior debt?
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