Tuesday Jul 29, 2014 Search
Weather | Athens
31o C
24o 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 dairy company Fage wins yogurt case in Britain
More than 120,000 households to receive special benefit
Greece names fifth privatization agency chief in four years
Great margin for growth in exports
Worlds largest solar boat on Greek mission
The worlds largest solar boat, the catamaran PlanetSolar, will embark on a Greek mission to find one of the oldest sites inhabited by man in Europe, an organizer said Monday. Starting on Au...
Municipal engineer dies in Thessaloniki following workplace accident
A 47-year-old mechanical engineer working for the Municipality of Thessaloniki died on Tuesday at the northern port city's AHEPA hospital due to injuries sustained on the job on July 21, the...
Inside News
VOLLEYBALL
Volleyball national team second in European League
Much as the national volleyball team tried to repeat in the finals of the European League the feat it had achieved in the semifinals, it failed to overturn the advantage Montenegro had got f...
SOCCER
Ranieri says he has little to change in Greek national team
The Hellenic Football Federation (EPO) presented Claudio Ranieri as the new Greece coach for the next couple of years, after the Italian manager signed his contract in Athens on Friday. I l...
Inside Sports
COMMENTARY
Through insecurity comes optimism
Prime Minister Antonis Samaras recently expressed his optimism regarding the quota of 180 Parliamentary deputies required for the election of Greeces next president, in order for the countr...
EDITORIAL
Futile policy
The policy that Israel has been pursuing vis-a-vis the Palestinians is wrong and futile. Current tactics have failed to resolve the security issue and, at the same time, they are rapidly dra...
Inside Comment
SPONSORED LINK: FinanzNachrichten.de
SPONSORED LINK: BestPrice.gr
RECENT NEWS
1. Greek dairy company Fage wins yogurt case in Britain
2. Worlds largest solar boat on Greek mission
3. More than 120,000 households to receive special benefit
4. Municipal engineer dies in Thessaloniki following workplace accident
5. Tsipras discusses Cyprus with Anastasiades in Athens
6. Venizelos to meet Nimetz in Athens
more news
Today
This Week
1. Greece names fifth privatization agency chief in four years
2. Archaeological council bans international climbers' gathering at Meteora
3. Venizelos to meet Nimetz in Athens
4. Worlds largest solar boat on Greek mission
5. Tsipras discusses Cyprus with Anastasiades in Athens
6. Municipal engineer dies in Thessaloniki following workplace accident
Today
This Week
1. Climber dies in Mount Olympus fall
2. Unequal after death
3. Greek sovereign debt at 174.1 percent of GDP in first quarter
4. Hedge fund Dromeus turns Greek tragedy to triumph with 160 pct gain
5. Quadriplegic woman on life support 'dies due to unpaid power bills'
6. Front-line threats
Find us ...
... on
Twitter
... on Facebook
About us  |  Subscriptions  |  Advertising  |  Contact us  |  Athens Plus  |  RSS  |   
Copyright 2014, H KAΘHMEPINH All Rights Reserved.