After pledging to mend its profligate ways, Greece took a crucial step on Thursday toward raising the billions needed to pay its bills and contain the crisis threatening the euro. Even as members of a large labor union occupied the offices of the Finance Ministry in Athens early on Thursday to protest proposed budget cuts, the Greek government won a vote of confidence for its plans in the credit markets. With many investors expecting Greece’s richer neighbors to come to the nation’s aid, Athens easily sold 5 billion euros ($6.8 billion) of 10-year bonds. The sale went far better than expected, as investors sought to buy three times the amount of bonds being offered. Still, in order to lure buyers, Greece agreed to pay an annual interest rate of 6.37 percent, twice the rate on comparable German bonds. [Note: Greece would pay $428m in interest alone every year on the 10-year bonds, according to HousingWire calculations. Meaning for a $6.8bn loan, Greece would pay more than $4bn in interest over the next decade.]
For Greece, bond sale is a step back from disaster
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