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A Swiss one franc coin is seen in front of the stars of the European flag in this illustration picture taken in Zurich January 19, 2015. German bond yields hit record lows on Friday while fears about Greek banks sent the country's borrowing costs spiralling - signs of the fallout from the Swiss National Bank's shock decision to scrap its currency cap. A surge in the Swiss franc after the SNB abandoned its 1.20 euro limit on Thursday saw investors flee equities and other risky assets, parking money instead in top-rated bonds. REUTERS/Arnd Wiegmann Reuters/Arnd Wiegmann

Bondholders who have stayed invested in Greek bonds through the election of the new party and its subsequent talks with its creditors, are enjoying massive returns. Meanwhile, Germany has issued its first negative yield bond, a new report has revealed. Germany is a member country of the Eurogroup that has lent billions of dollars in aid to Greece.

After winning the Greek elections, the newly appointed Finance Minister Yanis Varoufakis went to London to hold discussions with his European counterparts about a new bailout package. According to a report by Bloomberg, his commitment to the investors that Greece was not seeking a debt write-down reassured them.

The yield of the 10 year Greece Government bonds is currently at over 8 percent. The bond yield had risen to over 11 percent by end of January and early February. Richard McGuire, the head of European rates strategy at Rabobank International in London has reportedly said that the current yield levels of the Greek bonds are “notably better” than some of the other debt market instruments.

However, investors are said to be concerned about getting their returns from the Greek bonds, given the country’s debt issues. The Eurogroup recently gave a conditional approval for extending the current loans to the country, but a final agreement for a new bailout package has still not been finalised.

While investors in Greek bonds continue to enjoy high rates of return on their investment, Germany may be fighting a potential deflationary situation in its economy. According to a report by CNN, the country has issued bonds that carry a negative yield of 0.08 percent.

Investors are apparently interested in these bonds with negative interest because of concerns about deflation. With the possibility of investors losing money in other investments, the loss of value in the negative bonds is said to be lesser than the other investments.

The European Central Bank’s plan to undertake a big bond-buying program is expected to push the bond yields further down. The bank’s program is aimed at providing the economy with sufficient stimulus to put the region back on track of economic growth. Some of the countries where bonds are yielding negative returns are reported to be Belgium, Denmark, France, Germany, Japan and the Netherlands.

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