Heavily indebted nations ‘face restructuring’

YIELDS on government securities from Greece, Ireland and Portugal reached records amid speculation the heavily indebted nations won’t be able to avoid restructuring.

Ireland’s two-year yield reached a euro-era record 12.08% after the European Union said the nation’s debt burden surged the most in the currency area last year. Greek two-year yields have climbed almost 870 basis points this month, reaching 24.45% yesterday as investors priced in losses, or so-called haircuts, they may incur in the event of a restructuring. Lars Feld, a member of German Chancellor Angela Merkel’s council of economic advisers, said Greece cannot avoid restructuring its debts.

“There’s more speculation about debt restructuring, which is reflected in the Greek curve,” said Christopher Rieger, head of fixed-income strategy at Frankfurt-based Commerzbank AG. “I don’t see where any support for Greek debt will be coming from.