Greek/German bond yield spread more than 1,000 bps

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The premium investors demand to hold 10-year Greek government bonds rather than benchmark German Bunds topped 10 percentage points on Wednesday as investors fretted over Greece's rating downgrade the previous day.

The Greek/German bond yield spread was at 1,021 basis points, compared with 690 basis points at the European settlement close on Tuesday.

The 10-year Greek bond yielded 13.1 percent, its highest since mid-1996 and nearly three times the level at which the European Union plans to offer aid to the debt-stricken country.

The jump in yields came as the market absorbed a well-received auction of 6 billion euros of new 10-year 3.0 percent July 2020 Bunds.