Greek investors prepare for bigger losses

Greek bondholders are preparing to lose as much as 60 percent of their investments as European leaders try to impose a solution that reduces the nation?s debt burden by enough to end the debt crisis.

?Everyone is coming to the conclusion that a much deeper restructuring is needed to make Greece in any way sustainable,? said Emiel van den Heiligenberg, chief investment officer of global balanced solutions at BNP Investment Partners in London, which oversees about $742 billion. ?If the stock of debt doesn?t diminish, then the problems are going to be bigger and bigger and Greece will require rescue package after rescue package.?

Greek 10-year bonds yielded 23.97 percent at 5 p.m. Thursday, with the price on the securities at 37.41 percent of face amount. The rate was 2,186 basis points, or 21.86 percentage points, more than benchmark German bunds and compares with a yield of 11.59 percent for similar-maturity Portuguese debt and 5.82 percent for Italian bonds.

Europe?s leaders are intensifying efforts to contain the crisis that broke out in Greece almost two years ago, drove up state borrowing costs from Ireland to Italy and triggered the collapse of Dexia SA (DEXB), Belgium?s biggest lender by assets. European Commission President Jose Barroso said two days ago the region needs a coordinated approach to backstop the region?s banks and ?get ahead of the curve.?


Subscribe to our Newsletters

Enter your information below to receive our weekly newsletters with the latest insights, opinion pieces and current events straight to your inbox.

By signing up you are agreeing to our Terms of Service and Privacy Policy.