Greece sells T-bills, demand high

Greece on Tuesday easily sold a total of 1.56 billion euros ($2.12 billion) of 26- and 52-week T-bills, passing its first borrowing test since details of the European/IMF safety net were announced at the weekend.

KORNELIUS PURPS, FIXED INCOME STRATEGIST AT UNICREDIT

"Demand was sensationally high. Compared with the yields that one might have inferred from current market prices on the secondary market, yields were very low. Still, the yield was extremely attractive for investors. We are talking about 4 and 4.5 percent yield for six months."

"After the announcement of the details of the support plan, one can assume that there is no default risk on Greece over the next 12 months.

"So we have an EU member state which is default-free over the lifetime of the bills and pays a yield of 4.5 percent. This is sensational, one has to lay its hands on this, it's a free lunch. If Germany sold six-month bills it would pay 0.4 percent.

"Investors can be glad that the T-bill auction came so quickly after the weekend. I think that two or three days later, the yield would have already been clearly lower."

BEN MAY, CAPITAL ECONOMICS

"It's been pretty successful, heavily oversubscribed, so it's likely to ease markets worries of any imminent buyer strike in Greece. It's a positive endorsement of the bailout measures that went out over the week-end.

"But clearly the yields are still very high and longer term bond yields remain very high even by recent standards.

"So it does not really change the underlying position that Greece has very tough times ahead, it's going through a deep recession and that's going to lead to the debt to GDP ratio to surge higher. Given that backdrop, I expect bond yields are going to remain at pretty high levels for some time to come."

IOANNIS SOKOS, BOND ANALYST, BNP PARIBAS

"The issuance was very successful. Greece raised more funds than originally announced and the issue was oversubscribed several times."