Bonds went to ‘real money investors’

Breakdown of buyers shows nearly half of them are investment fund managers as interest proved diverse By Sotiris Nikas

Nearly half of the 3 billion euros raised by Greece through the sale of five-year bonds on Thursday were purchased by investors from the United Kingdom. Besides the success of the issue, the Finance Ministry is also satisfied by the fact that those who bought the new bonds are mostly long-term investors and did so without using leveraged capital.

According to a ministry announcement on Friday, “investor interest was intense, broad-based and diverse,” while “demand came from investors without leveraging and with a long-term investment outlook – i.e. real money investors.”

The breakdown by the ministry suggested that 1.47 billion, or 49 percent, went to investment fund managers, 990 million euros or 33 percent to hedge funds, 420 million euros or 14 percent to banks, and 120 million euros or 4 percent to social security funds and insurance companies.

The geographical distribution of the 3 billion euros was as follows: 1.41 billion euros (47 percent) to investors based in the United Kingdom, 210 million euros (7 percent) to Greek investors, 930 million (31 percent) to investors from the rest of Europe and 450 million (15 percent) to investors from the rest of the world, mostly from the US.

Besides the banks that assisted in the bond issue – Bank of America Merrill Lynch, Deutsche Bank, Goldman Sachs, HSBC, JP Morgan and Morgan Stanley – part of the new Greek bonds went to several other firms and investors which, according to market sources, included BlackRock – one of the world’s biggest fund managers that administers over $4 trillion – UBS, Oppenheimer, Fidelity and Societe Generale. Demand was so intense that 600 offers were attracted.

The ministry added in its statement that the new bonds have proven “Greece has now gained access to the international bond markets,” and that the issue “is setting a new mean point for the five-year period in the yield curve of Greek bonds that complements the current yield curve, while improving liquidity and making Greece’s access to investment funds with a long-term investment outlook easier [i.e. not hedge funds].”