Greece's first bond sale of the year has attracted three times more than the amount being sought. The yields on Greek bonds also fell from historic highs in a tentative sign of greater investor confidence.
Greece was seeking up to €5 billion, but market sources said demand for the bonds was up to €16 billion, according to reports. This evening, the yield on Greek bonds was at 6.126%, down from a peak of 6.32% on Friday.
On Friday, the yield level and the gap between Greek and German 10-year bonds hit levels unseen since Greece joined the euro zone in 2001. High yield levels are a sign of the perceived risk in buying a country's debt.
Greece has been hit by three credit downgrades in reaction to concerns over the country's huge debt and public deficit, which reached 12.7% of output last year, far above the 3% ceiling for euro zone members.
The Socialist government, which was elected in October, has since proposed a three-year crisis plan to slash the deficit to 2.8% of output in 2012. The government plans to borrow €54 billion on debt markets this year.
