Wednesday April 16, 2014 Search
Weather | Athens
19o C
13o 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)  
IBM to open new center in Athens for big data analytics
Benefits to all single-parent families and new unemployed
Supermarket chains sense worst is yet to come
Cost of borrowing via T-bills drops to pre-bailout levels
PASOK plays down coalition row over scheme for homeless
PASOK remained tight-lipped on Monday about a row that broke out with its coalition partner, New Democracy, late on Monday after Prime Minister Antonis Samaras announced the creation of home...
Greeces new public sector wage structure ready in September
A new wage structure for civil servants will be ready in September, Administrative Reform Minister Kyriakos Mitsotakis said on Tuesday. The new scheme will contain financial incentives for p...
Inside News
BASKETBALL
Defense lets Olympiakos down at Madrid
Olympiakos played second fiddle to Real Madrid in a rather spectacular game in Spain on Tuesday going down 88-71 to trail 1-0 in the best-of-five quarterfinal series with the Spanish giant. ...
SOCCER
Apollon is relegated, Xanthi to face survival play-off
Apollon followed Aris to the second division and Xanthi will contest a relegation play-off, as the end of the regular season of the Super League on Sunday produced predictable results that a...
Inside Sports
COMMENTARY
Empty vessels
US satirist and journalist Patrick Jake ORourke once said about American politics, The Republicans are the party that says government doesnt work and then they get elected and prove it. ...
EDITORIAL
National targets
The official news regarding Greeces present fiscal state of affairs appears to be very good indeed and is paving the way for serious negotiations with the countrys creditors and partners r...
Inside Comment
SPONSORED LINK: FinanzNachrichten.de
SPONSORED LINK: BestPrice.gr
RECENT NEWS
1. Defense lets Olympiakos down at Madrid
2. IBM to open new center in Athens for big data analytics
3. Benefits to all single-parent families and new unemployed
4. Supermarket chains sense worst is yet to come
5. Cost of borrowing via T-bills drops to pre-bailout levels
6. Eurobank reaps major investor interest
more news
Today
This Week
1. Greece's market return mirrors return of tourists
2. GD lawmaker hails Hitler, condemns homosexuality in interview
3. Suspected smuggler dies after trying to ram Coast Guard vessel off Kos
4. New Democracy to confirm list of candidates for Euro elections
5. Anchor investors bid for chunk of Greek Eurobank's share offer
6. Greek far right fires up Athens election campaign
Today
This Week
1. Bomb explodes outside Bank of Greece
2. Time to take a hard look at debt sustainability, says OECD chief
3. For faith and country
4. CCTV footage from Nigrita Prison shows signs of inmate torture [Video]
5. Samaras sees no need for third bailout
6. Car bomb explodes outside Greek Central Bank building, no one hurt [Update]
Find us ...
... on
Twitter
... on Facebook
About us  |  Subscriptions  |  Advertising  |  Contact us  |  Athens Plus  |  RSS  |   
Copyright 2014, H KAΘHMEPINH All Rights Reserved.