Greek yield spread widens as PM reshuffles

LONDON: The premium investors demand to hold Greek government bonds rather than benchmark German Bunds rose on Friday as Greece reshuffles its cabinet in an effort to win support for austerity measures key to securing more aid.

Greek Prime Minister George Papandreou will name a new cabinet later in the day to muster support for painful economic reforms, in the face of public unrest and a split in his party that could push the country closer to debt default.

The Greek/German 10-year government bond yield spread widened to 1,596 basis points, up around 40 bps versus Thursday's settlement close. Outright 10-year Greek yields hit a euro-era record of 18.9 percent.

Copyright AFP (Agence France-Presse), 2011