Who Bought The New Greek Bonds: Here Is The Answer

Tyler Durden's picture

After triumphantly returning to the bond market three years after it last issued a euro-denominated long bond (which one year later nearly defaulted when only a third bailout prevented Grexit), this morning Bloomberg has provided details of who the lucky buyers of the just priced €3BN bond offering were. And not surprisingly, the biggest source of new funds for the Greek government (which will then use most of this to pay interest owed to the ECB) were US buyers.

As Bloomberg notes, just under half, or €1.425BN of the €3BN deal was new money with €1.57b of existing paper rolled, with the following geographic distribution of new sources of cash:

  • U.S. 44%
  • U.K./Ireland 26%
  • Greece 14%
  • France 7%
  • Spain/Portugal/Italy 3%
  • Germany/Austria 3%
  • Others 3%

By investor type:

  • Fund managers 46%
  • Hedge funds 36%
  • Banks/private banks 13%
  • Others 5%

Meanwhile, roughly half, or €1.574BN of the existing bondholders rolled into the new issue, as follows:

  • Greece 75%
  • France 11%
  • Switzerland 6%
  • U.K./Ireland 4%
  • U.S. 3%
  • Others 1%

And by investor type:

  • Banks/private banks 74%
  • Fund managers 16%
  • Hedge funds 5%
  • Insurance 4%
  • Others 1%

But the best news of all for this new batch of mostly American investors: the bonds are already profitable: the new 5Y bonds were trading tighter one day after the country’s first sale in three years.

The spread on new Greek paper to the underlying Obl ~8bps lower, according to Bloomberg data. The bonds, which were launched at +476.7bps, are now being quoted by Greek banks at 99.32 bid, or +468.6bps as of noon London time.

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Déjà view's picture

Payback for AAA rated MBS sold to €uro-P-ons...

Creepy_Azz_Crackaah's picture

"U.S. 44%"

My God, we're stupid fucks.

asteroids's picture

Not really. That fucking ECB weasel will simply print up fiat to backstop those bonds.

steelhead23's picture

When logic ruled the markets, one could reduce such risk by playing the Euro-dollar pair in the FX market.  But with CBs debasing their currencies everywhere, it's pretty much a craps shoot.  C'mon 7.


buzzsaw99's picture

luck has nothing to do with it.  magic draghi waves his wand and makes those marketable.

GotGalt's picture

I'm hoping it was all Calpers, ha ha ha.

shizzledizzle's picture

US buys European bonds, Europe buys US bonds and a few ACH transactions later everything is back to where it started. Looks great on paper though. 

Bernardo Gui's picture

The market clearly expects future bailouts. As long as the ECB can print euros, there will be a market for junk sovereign debt. The same assumptions have driven the US equity market to record highs. Markets and fundamentals mean nothing. What can go wrong?

el buitre's picture

Despite their new rules, the central banks will use bail-outs until they don't, at which time all bank assets will be bailed in in one yuge, sudden putsche.  Otherwise they would start a bank run before they are ready, i.e. before all paper cash is gone and people have some recourse.  Once they pull off the giant bail-in, the COMEX defaults and becomes irrelevant and PM's skyrockets.

Latitude25's picture

That's your 401k.  Good luck

back to basics's picture

Easy money for these funds. The EU will demand the daily sacrifice of 12 Greek virgins (if there are any left) to hand over new loans to Greece so that they can pay these bonds when they mature instead of defaulting. To call this whole thing a farce at this time is to underestimate the extend of the sadistic hardship the Greek people are enduring all in the name of the euro.

XBroker1's picture

Had to work vagina worship in there somehow I suppose. After all, what 'other' value do fee-males have.

silverer's picture

US buyers? Well, that explains it. This is going to be good.

SoDamnMad's picture

US buys Greek bonds, Germany buys few Greek bonds, Greece pays ECB (German banks) and Merkel hates our guts.  Figures.

syzygysus's picture

Cosigner is Germany, of course people are buying that shit.  Kind of like a dorky barely employable kid with a minimum wage job getting a new Hummer cosigned by rich daddy.

Dragon HAwk's picture

10 druggies in a room all writing themselves and each other IOU's

shovelhead's picture

Make great swaps for Puerto Rican Bonds.

youngman's picture

Just when you think we learned from the last disaster....we do it again....bail outs are a new investment strategy.....not when I went to school...but now....its a whole new ballgame...they dont even have a ball

small axe's picture

perhaps the new bondholders should go to Athens and collect their paper in person ... nah, that would make Greece's misery personal. Much better to count the profits from afar, never needing to admit your role. 

fucking bankers

I am a Man I am Forty's picture

Did Chelsea's husband start a new fund??

Joe A's picture

It is just like wars. Tax payers fund them or are collateral. Speculators, companies, banks make a profit.

TeaClipper's picture

Pssssssst Greece, You did get the memo about Germany quietly printing deutsche marks again didnt you? Would be ironic if you clowns were the last passengers in the Euro funny car

tuetenueggel's picture

Owning even the junkiest bonds of any EURO-memberstate never will be a fault. ECB will buy all of them so not a single investor takes any risk.

They will be bought with freshly printed ECB Euros. at a rate of 99 % payed by Germany.

Criminals from 1918 until now without any interruption are:

USA, GB, France and Italy.

bankbob's picture

USA hedge fund managers bought the most?  Probably for their retirement fund customers who need the higher yields.

Just because something has a soverign guarantee - does not mean it is actually guaranteed.


mr bear's picture

Anybody else think Draghi looks like a Bond villain? (No pun intended.)

Which, I guess, would mean Janet Yellen is Rosa Klebb.

surf@jm's picture

Well of course......

Government pension fund managers in the states, can point to the Greek bond interest rate, to prove they can keep their pension funds solvent.......

It will work out as well as buying a Puerto Rican bond.......

Too-Big-to-Bail's picture

Not as much risk as people think -- They'll either be bailed out by Germany, or refinanced to kick the can even further into the future. 

CatsPaw's picture

Fund managers and Heage funds buying Greek bonds?

No wonder you are getting negative returns on your retirement.