Friday November 28, 2014 Search
Weather | Athens
16o C
10o C
News
Business
Comment
Life
Sports
Community
Survival Guide
Greek Edition
Hedge fund firm LNG bets on short-dated Greek bonds

Hedge fund firm LNG Capital is betting on short-dated Greek bonds as one of a number of managers to believe the debt-laden country could end up paying back some of its bondholders at face value.

Louis Gargour, chief investment officer at the London-based firm, told Reuters he has built up positions in Swiss franc-denominated Greek bonds maturing in May next year and U.S. dollar-denominated bonds maturing in July.

The bet is that Greece, which is currently buying back some longer-dated bonds in the secondary market at a discount to nominal value in an effort to cut its debt and unlock aid from international lenders, will be relatively unconcerned about small tranches of debt with just months to run.

Gargour also hopes the fact the bonds were not issued under Greek law will make it harder for any adverse terms to be imposed on creditors holding out for a full pay-out.

"I think it's a great opportunity to make a lot of money, said Gargour, whose LNG Europa Credit fund is up 11 percent in the first 10 months of this year.

"The logic behind the trade is that they have a very high probability of arriving at par due to the reluctance of the government to default again and restructure those bonds."

Gargour accumulated the positions at a price of between 65 and 75 cents on every dollar of face value. They now trade around 82 cents, he said.

The bonds would not be the first to be paid out at par since Greece's debt crisis began.

In May Greece performed an about-face when it paid in full the holders of one bond who had earlier rejected an offer to exchange it for lower value debt despite the government having said at the time of the offer in March that any 'holdouts' on the exchange would get nothing.

Gargour's bet also has parallels with the positions taken by hedge funds who bought longer-dated Greek bonds at knock-down prices earlier this year and have since seen huge gains.

Some of these funds are preparing to reject Greece's buyback, believing that English law offers them greater protection and increases the chance of a higher payout.

Some cite court rulings in the long-running legal battle between Argentina and holdout creditors, which have said Argentina must pay holders of restructured bonds and holdouts simultaneously.

Gargour added that there were plenty of bargains to be found in Greece, due to international investors' poor perception of the country.

"We're also long (the bonds of rail company) Hellenic Rail, which mature in December, he said. There are a lot of opportunities for anomalous trades that not a lot of people are focusing on, as they consider Greece a basket case."

[Reuters]

ekathimerini.com , Friday December 7, 2012 (13:20)  
Greek retail sales rise for fourth month in a row in September
Greek economy expands 0.7 pct q/q in Q3
Athens water supply 9-month profit falls 45 pct on lower charges
PPC profits power up in Jan-Sept
Minister opposes plans to establish Islamic Studies department at Thessaloniki university
Minister of Macedonia and Thrace Giorgos Orfanos has criticized plans to establish a department of Islamic Studies at the Theological School of the Aristotle University of Thessaloniki. In c...
Samaras meets Venizelos ahead of Turkey visit
Prime Minister Antonis Samaras will meet Foreign Minister Evangelos Venizelos at 12.30 p.m. on Friday. The two are expected to discuss Venizelos's visit to Turkey where he will hold talks wi...
Inside News
SOCCER
PAOK is one win from Europa Leagues last 32
A late brace by Stefanos Athanasiadis gifted PAOK a precious win at Dynamo Minsk on Thursday, meaning that the Thessaloniki team is one win away from graduating from the group stage of the E...
BASKETBALL
First defeat for Olympiakos in Euroleague
Olympiakos suffered its first Euroleague loss of the season going down 89-70 at Laboral Kutxa on Thursday, although the Greek team remains the favorite to clinch the top spot in its pool. Th...
Inside Sports
COMMENTARY
Change of US president wont mean change of foreign policy
Americans have again voted for change in Washington as opposition Republicans take control of both houses of the US Congress. As attention now turns to the 2016 presidential race, it's time ...
COMMENTARY
The presidential election paradox
A few days ago, speaking with a visiting colleague who neither works in Europe nor covers events here, I suddenly felt how much we Greeks take for granted some things that should have worrie...
Inside Comment
SPONSORED LINK: FinanzNachrichten.de
SPONSORED LINK: BestPrice.gr
RECENT NEWS
1. Greek retail sales rise for fourth month in a row in September
2. Greek economy expands 0.7 pct q/q in Q3
3. Minister opposes plans to establish Islamic Studies department at Thessaloniki university
4. Samaras meets Venizelos ahead of Turkey visit
5. Child molester suspect photo released by police
6. Armed man arrested on Thessaloniki campus
more news
Today
This Week
1. Lebanese FM: Cyprus may be jihadi transit point
2. Athens water supply 9-month profit falls 45 pct on lower charges
3. Armed man arrested on Thessaloniki campus
4. Child molester suspect photo released by police
5. Change of US president won't mean change of foreign policy
6. Samaras meets Venizelos ahead of Turkey visit
Today
This Week
1. Give Greece a chance
2. Scientists expand excavation of ancient Amphipolis
3. Extremism from a bygone era
4. Greece paralyzed by major strike, flights cancelled
5. Piraeus nightclub shooting leaves 3 seriously injured
6. Coscos Greek unit adds multinational rail-freight client
Find us ...
... on
Twitter
... on Facebook
About us  |  Subscriptions  |  Advertising  |  Contact us  |  Athens Plus  |  RSS  |   
Copyright 2014, H KAΘHMEPINH All Rights Reserved.