Analysts remain unconvinced that Greece is over its troubled economic past, despite a warmly received upgrade on Monday by the ratings agency Fitch.
The yield on the five-year Greek sovereign bond dipped by 5 basis points Monday following the upgrade, with Fitch citing improved economic conditions in the southern European country. The country's 10-year bond yield had also dropped more than 14 points basis last Friday, showing that investors are turning more confident on the embattled economy.
However, some market participants are still cautious about the medium to long-term prospects of Greece and are watching out for plans from the euro zone to make Greece's debt more sustainable in the long term.
"Greece is definitely turning a corner, as it will exit its economic program successfully unlike the two other programs. On top of that, after growing by 1.3 percent in 2017, the Greek economy is likely to outperform the euro area this year," Yvan Mamalet, senior euro economist at Societe Generale, told CNBC via email.
"However, the medium-term fundamental situation remains problematic," he said, "without significant debt relief measures, such as the ones recommended by the IMF (International Monetary Fund), the Greek debt level would most likely remain at (an) unsustainable level."
European creditors have agreed to grant some relief to Greece by making its debt more sustainable. However, the final details of such debt restructuring are still being prepared. Nonetheless, they are expected to be implemented only after the program has come to an end, which is scheduled to take place in August, and only if market conditions require such measures to be triggered.
Ben Lofthouse, co-manager of global equity income at Janus Henderson Investors, told CNBC Monday that Greek bonds are "not the best place" to invest due to the long-term challenges.
"European economies are growing above potential, interest rates are very low, so even the weakest points in Europe are doing well but the big challenge, I believe, comes with the next recession and then I think countries like Greece will once again be challenged," he said.
However, investors are now seemingly content with holding Greek debt. On February 8, Greece issued a new seven-year bond and raised 3 billion euros ($3.72 billion) at a yield of 3.5 percent. The issuance proved to be oversubscribed.
"No doubt the attractive yield level combined with the improvement in the economic conditions and the outperformance in fiscal targets were key reasons behind this outcome," Mamalet said about the issuance.
Jan Randolph, director of sovereign risk at IHS Markit, told CNBC that Monday's drop in yields was supported by Fitch's rating upgrade to "B" from "B-" on the basis that there is lower political risk, the country is hitting higher-than-expected fiscal targets and a has seen a steady rise in its GDP (gross domestic product) growth.
"All this adds up to an expectation that Greece is in genuine turnaround phase that is supportive of Greek assets, including bonds, and will exit the bailout around mid-year if it continues on these paths," he added.
Greece is set to break free from years of international help in August when its third bailout program is set to finish.