The behavior of Greek government bonds in the markets shows that the country is close to securing an investment grade from the rating agencies, according to a new analysis by Piraeus Bank.
Using data on CDS government bond prices for the first quarter of 2004 to the third quarter of 2021 for 60-country bonds, the economists in the systemic group estimate a statistical model that allows them to be translated, as recorded in Bloomberg, into ” imputed” credit rating levels
According to this, the CDS markets price the Greek risk premiums at investment grade levels.
More specifically, the main conclusions from the analysis of Piraeus Bank are the following:
The evolution of the Hellenic Republic’s debt rating according to the international credit rating agencies (Moody’s, S&P, and Fitch) against the credit rating as it is “presumed” by the statistical model of the bank and the prices of the CDS of the states was examined.
The most immediate opportunity of the CDS market to integrate and reflect the current developments in both the downward (2008-2011) and the upward (2017-present) phase of the cycle becomes apparent.
At the same time, the significant degree of conservatism that governs the rating agencies is recorded, as the CDS markets price the Greek risk premiums at investment level levels, while the rating of the companies lags significantly behind this very essential milestone.
In addition, a comparison was made between the imputed credit ratings of Greece, Spain, Portugal and Italy.
This results in a significant upgrade of the course of Portugal, which while in 2011 showed behavior similar to that of Greece, slowly but gradually differs significantly and today is evaluated similarly to Spain.
“It is estimated that Italy is following the opposite course, which is now lagging behind Spain and Portugal, now following a course similar to that of Greece,” notes Piraeus Bank.
Latest News
IMF: Greek Growth in 2024 at 2%; Debt to Ease to 158.8% of GDP This Year
Projected consumer prices are forecast to rise by 2.7%
Major Increase in Russian Natgas Imports by Greece in 1Q 2024
Russian state natgas exporter Gazprom dominated imports to the country, mostly through the overland pipeline entering via a northern frontier pipeline
Lamda Development Announces First Profitable Year for The Ellinikon Project
The ATHEX-listed developer reported 206 million euros in EBITDA for FY23, a 69%-percent increase from 2022 results
Europa Nostra Adds Sifnos, Serifos, Folegandros to Most Endangered List
Europa Nostra says three Greek islands are at risk due to surge in tourism development and rampant construction
EU Cracks Down on Social Media Influencers Making Illegal Profits
A recent EU inquiry uncovered 358 online influencers, among them 20 in Greece, found to be violating consumer laws
Greek PM Announces €2 Billion Decarbonization Fund for Greek Islands
Greece bolstered its drive for a greener economy with the launch of a €2 Billion Decarbonization Fund for the Greek islands
Eurobarometer Survey: Greeks Acknowledge EU Influence-Pessimistic about Future Living Standards
Regarding their participation in the forthcoming European parliament elections, 60% of Europeans (+11 points compared to March 2019) and 56% of Greeks express interest in voting in the June European elections
Eurostat: Greek Inflation at 3.4% in March
In the eurozone, the consumer price index (CPI) dropped to 2.4%, while the average EU settled at 2.6%
ND Still Far Ahead of Rival SYRIZA, Although Support Slipping
Asked who they trust most for prime minister among the current political party leaders, respondents, by 40% answered “no one”.
BoG: Greek Households Pessimistic Over Course of Inflation
The sentiments were found in an “Inflation Monitor” posted by the Bank of Greece (BoG) on Monday.