By William L. Watts, MarketWatch LONDON (MarketWatch) -- Signs that investor demand for Greece's syndicated offering of five-year government bonds is strong helped calm European financial markets Monday, analysts said. News reports said managers of the offering reported that orders for the new bond have exceeded 5 billion euros ($7.1 billion). Reuters said orders were near 9 billion euros. Greece had planned to issue 3 billion to 5 billion euros of bonds. Greece subsequently tightened its price guidance for the issue to a yield premium of 3.5 to 3.65 percentage points over mid-swaps, Dow Jones Newswires reported. Initially, Greece said the bonds would be priced at a premium of around 3.75 percentage points over mid-swaps. Indications of strong demand helped the euro reverse a loss versus the U.S. dollar to change hands at $1.4175, a rise of 0.3% on the day. The euro was aided by a "good reaction to the new Greek bond," said Roberto Mialich, currency strategist at UniCredit Bank in Milan. Worries about Greece's debt load have contributed to recent weakness in the euro. The Greek government has vowed it will meet all its debt obligations. It has submitted a plan to cut its budget deficit to less than 3% of gross domestic product -- the European Union cap -- by 2012 from more than 12% last year. The yield premium investors demanded to hold Greek-government paper soared last week amid the concerns over the nation's debt position. The spread between 10-year Greek bonds and their German counterpart widened as far as 3.18 percentage points -- a record -- late last week. The spread was seen around 2.98 percentage points in recent action, traders said. The pricing news was encouraging, but the proof will come with the actual sale results, said Nick Stamenkovic, economist at RIA Capital in Edinburgh. Greece's biggest test may come in the April-May period when it must refinance around 20 billion euros of debt out of the total 54 billion in borrowing required for this year, according to analysts at UniCredit.

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