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OTE: A Barometer For The Greek Crisis

18 March 2015 by lberuti

In the credit derivatives market, there are few instruments that enable to get a feeling for what investors hope or fear for Greece. OTE ( Hellenic Telecommunications Organisation SA ) is most definitely one of them though. And the picture painted by the above grapple is a bit worrying. The market gave obviously little credit to the negotiations which begun late February and risks have been rising steadily ever since. People’s nervousness has directly translated in a one way upward trajectory for OTE’s 5 year risk premium (it shot up by 40bps today’s alone), but also in substantial amount of CDS being traded. You can see at the bottom of the chart that transactions worth $73mln were reported every day in DTCC over the last week.