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Eucklis Tsakalotos faces a difficult mission in the US: he has to convince more important and conservative portfolios of the new history of Greek bonds and "unlock" their interest in the flagship issue of the benchmark bonds in 10 years.
The meetings that the Finance Minister in New York and Boston will have in a few days were organized by Rothchild, who advises the state for debt management to broaden the audience of Investment government bonds, including the larger, real money funds.
Up to now, Greek bonds have attracted hedge funds because they are clbadified as "junk" and the country's bankruptcy is recent, with the "haircuts" of bondholders for the PSI, as well as downgrades by rating agencies due to the events of the first half of 2015.
Large real money investment portfolios continue to refrain from investing in bonds However, there are relatively large conservative portfolios that could open their gates to Greek bonds in order to differentiate their positions in eurozone government bonds, which still offer very low yields. investors (negative even for 7 years in Germany), by introducing in small tranches Greek securities, which have by far the highest returns (the range of ten years Greco-German currently stands at 3.7% )
It is characteristic that in the last contacts of Yiorgos Houliarakis at the end of June in London, where a large number of hedge funds appeared, a representative of a British pension pension fund is appeared, proving that Greek bonds are starting to interest and some conservative administrators
New risk profile
The investment story that Euclid Tsakalotos has to face meetings with foreign managers in New York and Boston is based in the latest debt agreement and its beneficial consequences regarding the risk profile of Greece
The Minister of Finance will emphasize that the cushion of 24 Billion euros ensures full government funding for two years, even if fails to lift one euro from the market, and with the extension of the grace period of the EFSF loans, a "weak corridor" low funding needs of the government opens up until 2032, which means that the risk of "bad luck" "[19609011] June is also the commitment given by the European Union to long-term obligations issued by the State
. If Greek surplus and growth forecasts are not confirmed, European creditors in the official sector will bear the burden of any necessary debt relief. In other words, private sector creditors will not need to be re-cut, as was the case in 2012.
Houses and the ECB
Why a fund manager buys- Does it now hold Greek bonds and does not it provide? Does that make it safe, at 1-1.5 years, when rating agencies will have increased Greece's investment rating of 5-6? degrees
The argument of the Greek side is that those who are nowadays with very high yields, 3.5% for a 10-year bond, will record significant gains, while the rating agencies will improve the Greek securities until they reach the investment level.
However, the climate that will be shaped by the European Central Bank in its subsequent decisions is of great importance for the valuation of Greek bond investments. On July 26, he will decide whether, as Yiannis Stournaras has suggested, he will maintain the exceptional acceptance of Greek bonds for refinancing (waiver). Without the derogation, the banks will not have the same ability to invest funds in Greek bonds, since they will not be able to use them for their financing by the Eurosystem.
In addition, the ECB will decide whether the Eurosystem can adhere Greek bonds in the quantitative easing program, as suggested by the governor of the Bank of Greece. If this happens, there will be a new source of demand for the Greek securities, not only until the expiry of QE at the end of the year but also after its expiration, after the end of the year. BCE will have continued to buy securities worth $ 15 billion. euro and month from here to 2019.
It is worth noting, however, that the ECB has ceased to create a positive climate on the European bond market as its intentions to raise interest rates from September or October led to a significant rise in yields today in most eurozone stocks, with a yield at 10 years Greek slightly above 4%
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