Path of bond was ‘known’ to bank

A document obtained by Sunday’s Katherimini appears to cast doubt on assertions by US bank JP Morgan that it was not aware that a -280 million bond it sold to a London-based hedge fund would end up in the hands of Greek pension funds. The document is a letter that was sent from JP Morgan Securities to the Social Security and Pension Fund of Health Professionals (TEASY) last September – five months before the bond was traded. The letter appears to give details about the interest that the fund could obtain from purchasing a structured bond that was being issued by the Greek government. TEASY was not one of the pension funds that bought the note but sources told Kathimerini that the same information from JP Morgan was given to at least four other funds, including the Social Insurance Workers’ Auxiliary Pension Fund (TEAPOKA), which eventually invested in the bond. JP Morgan agreed to a deal last week to buy back the bond after it emerged that the funds had paid some -5 million too much for it. However, the financial institution strongly denies that it was aware the bond would end up with the funds, which bought the note at face value. JP Morgan sold the bond to hedge fund North Asset Management at 92.95 percent of its face value. An investigation into the affair by two Greek prosecutors is expected to lead to around 30 people being charged tomorrow.

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