Japonica extends offer to buy Greek bonds

Japonica Partners & Co, the US investment firm trying to buy as much as 4 billion euros ($5.3 billion) of Greek government debt, said it’s making a final, monthlong extension of its tender offer.

The offer now has a deadline of September 30, according to a statement issued by the Providence, Rhode Island-based company on Friday.

Japonica first made its tender offer in June and has extended it twice since then.

Xander Heijnen, a spokesman for Japonica, said there will be no further extensions.

Japonica last month announced it would pay a minimum purchase price of 40 percent of the bonds’ principal amount, saying the offer reflected a fair value for securities that are volatile and “highly illiquid.”

The offer falls below the so-called strip of 45 percent, which is the average price investors are bidding for outstanding Greek government debt, according to Athens-based Piraeus Bank SA.

“After this deadline, we will begin to allocate our funds elsewhere,” Heijnen said in an interview on Friday.

Japonica said in the statement that it’s appropriate to apply a 15 percent to 20 percent discount to Greek debt given that buyers are limited, making it difficult for bondholders to sell their stakes.

With the discount included, Japonica said its offer to purchase bonds at 40 percent of the principal amount is actually a premium to closing prices on August 23.

Japonica reduced the number of specific Greek bonds it’s targeting from 11 to six, maturing between February 2028 and February 2033.

Hedge funds including Third Point LLC and Greylock Capital Management LLC made money last year by buying the country’s government bonds, betting that European officials would continue to rescue the nation from financial collapse to prevent the region’s debt crisis from spreading.