Saturday April 18, 2015 Search
Weather | Athens
14o C
09o C
News
Business
Comment
Life
Sports
Community
Survival Guide
Greek Edition
Hellenic petroleum structured note draws bets on Greek recovery

By Alastair Marsh

Bank of America Corp. sold the first structured notes tied to Greece’s largest refiner, Hellenic Petroleum SA, as investors bet on a recovery in the nation at the heart of Europe’s debt crisis.

The lender raised a total $8 million in the first securities linked to a Greek company since 2008, according to data compiled by Bloomberg. The notes combining debt with derivatives were offered in four parts and mature in ten weeks to 36 weeks.

Investors are returning to Greece after international creditors approved a further 7.5 billion euros ($9.7 billion) of bailout funds to the country last week, citing progress in fiscal and structural reforms. That was followed by an upgrade from Fitch Ratings, which sparked a sovereign-bond rally that pushed yields on 10-year bonds to the lowest in three years.

“Positive momentum is building in Greece and some investors are assuming the worst is over and looking for opportunities to profit from a recovery,” said Nordine Farsi, head of structured credit trading at Landesbank Baden-Wuerttemberg in London.

The zero coupon bonds linked to Hellenic Petroleum were sold at a discount of 1.7 percent to 6.3 percent. Investors in zero coupon securities typically receive returns based on the difference between the discount and par.

Alexandra Parry, a spokeswoman for Bank of America in London, and Vasilis Tsaitas, a spokesman for the Athens-based refiner, declined to comment on the notes.

Hellenic Petroleum entered the bond market for the first time last month, selling four-year notes that pay a coupon of 8 percent, according to data compiled by Bloomberg. Investor demand for riskier assets spurred the unrated refiner to increase the size of the offering to 500 million euros from 400 million euros.

Demand for debut bonds from Greek refrigerator equipment supplier Frigoglass SA, which sold 250 million euros of debt last week, also exceeded expectations, said Torsten Tuerling, chief executive of the junk-rated company.

“There is strong momentum towards anything Greek at the moment,” said Gabriel Sterne, an economist at Exotix Ltd., a London-based brokerage specializing in illiquid bonds and loans.

Fitch upgraded Greece’s credit rating to B- from CCC, or six levels below investment grade, on May 14, citing progress in rebalancing the economy and a lower risk of exit from the euro area. Still, public debt sustainability remains “far from assured and will be dependent on economic recovery and a sustained primary fiscal surplus,” Fitch said in a statement.

Greece’s economy will shrink another 4.2 percent this year, its sixth year of recession, before recovering 0.6 percent in 2014, according to a European Commission report published May 17, which described the country’s outlook as “inherently uncertain.” Unemployment also reached a record 27 percent in February, according to the Hellenic Statistical Authority.

Xenon Capital Plc, a special-purpose vehicle incorporated in Ireland, sold the last structured notes tied to a Greek company in May 2008, Bloomberg data show. The 5 million euros of 3 1/2-year notes were linked to the debt of Alpha Bank SA, Greece’s third-biggest lender.

Credit-linked notes can have higher yields and tailored maturities that may not be available in the bond market. Investors suffer losses in the event of a default by the bank issuing the securities or the linked entity. [Bloomberg]

ekathimerini.com , Tuesday May 21, 2013 (11:29)  
US Treasury secretary urges Greece to reach debt deal
Greece poised to sign gas deal with Russia, says German weekly
Russia gas deal would not solve Greece’s problems, says Schaeuble
Spanish official slams Greece, says time ´running out´
Kotzias to begin US visit with Kerry meeting in Washington
Foreign Minister Nikos Kotzias is due to begin a five-day visit to the US on Monday. He will begin his trip by meeting Secretary of State John Kerry in Washington, where he will also hold ta...
Turkey asks for investigation into Greek mosque attacks
The Turkish Foreign Ministry has asked Greece to investigate the vandalism of two mosques in Komotini following incidents on Friday. “Turkey requests Greek authorities to clarify as soon as ...
Inside News
BASKETBALL
Triumph for Olympiakos at Barcelona
Olympiakos produced its best away performance so far this season to defeat host Barcelona 76-63 on Friday and snatch the home advantage in the Euroleague play-offs. The Reds have now tied th...
BASKETBALL
Another heavy loss for improved Panathinaikos in Moscow
Panathinaikos raised its performance since Tuesday but still suffered a 20-point loss at CSKA Moscow on Thursday to find itself trailing 2-0 after Game 2 of the Euroleague play-offs. Having ...
Inside Sports
COMMENTARY
Back to the beginning
From 1980 up until the present day, the Greek educational system has given a false sense of democratization based on a flawed system of educator and student participation. The educational ou...
EDITORIAL
Protecting a key asset
Tourism has emerged as the only real “heavy industry” in Greece to have weathered the crisis so it is not only a question of duty that everyone protect it but also interest. To begin with, m...
Inside Comment
SPONSORED LINK: FinanzNachrichten.de
SPONSORED LINK: BestPrice.gr
 RECENT NEWS
1. US Treasury secretary urges Greece to reach debt deal
2. Greece poised to sign gas deal with Russia, says German weekly
3. Russia gas deal would not solve Greece’s problems, says Schaeuble
4. Spanish official slams Greece, says time ´running out´
5. Kotzias to begin US visit with Kerry meeting in Washington
6. Turkey asks for investigation into Greek mosque attacks
more news
Today
This Week
1. Back to the beginning
2. Golden Dawn on trial amid conflict over court venue
3. Terrorism suspects caught following German request
4. Kotzias to begin US visit with Kerry meeting in Washington
5. Protecting a key asset
6. Greece poised to sign gas deal with Russia, says German weekly
Today
This Week
1. Quarantine for Greek bank subsidiaries in neighboring countries
2. Greece and lenders head back to technical talks
3. Contraband is big business in Greece
4. FYROM push expected at EU meeting
5. Islands of eastern Aegean struggle as migrant influx triples
6. Greek finance ministry hits back at German newspaper report
   Find us ...
  ... on
Twitter
     ... on Facebook   
About us  |  Subscriptions  |  Advertising  |  Contact us  |  Athens Plus  |  RSS  |   
Copyright © 2015, H KAΘHMEPINH All Rights Reserved.