Dan Loeb Reveals Major New Position In Samurai Bonds Of Norwegian Eksportfinans ASA

Tyler Durden's picture

Whereas we have already noted that Dan Loeb's Third Point closed 2011 unchanged due to a disappointing December, today we note that according to his latest monthly performance update Loeb appears to have opened a major new position in the bonds of recently troubled Norwegian financial company Eksportfinans ASA. The chart below compares his October and December top holdings in which it is obvious that as of December 31, Third Point's third largest position is in the bonds of the private guarantor, which recently got in trouble following its downgrade to junk status in late November as Oslo withdrew its support. the result was a sharp drop lower in the bonds of the company, which traded down by 20 points on the news. So what is Loeb seeing here that makes him confident the bonds, all $33 billion of them, the bulk of which are Samurai, or yen-denominated, will surge sooner or later: another TBTF scenario, bond call play, or something else? One thing is certain: the 13F chasing lemmingrati will promptly jump in these bonds and take them much higher even if absolutely clueless why.

Third point top holdings before:

and after -note #3:

EXPT bonds:

Some color on Eksportfinance from the FT:

Norway’s Eksportfinans, a partially state-owned company that gives government-guaranteed loans to foreigners to buy the country’s exports, has been downgraded to junk by Moody’s Investors Service after Oslo withdrew support.


The Norwegian government’s decision not to grant Eksportfinans permission to sidestep European Union capital requirements that limit concentrations of large loans “has almost eliminated its franchise and business model”, Moody’s said


“It also implies that the government lacks commitment towards Eksportfinans,” the rating agency added.


Moody’s cut Eksportfinans’ rating to Ba1 from Aa3, a seven-notch downgrade, and left them on review for further cuts.


The move triggered forced selling of its bonds by investors that are only allowed to own investment grade debt, analysts said.


Eksportfinans had NKr192bn ($33bn) of outstanding debts at the end of the third quarter, much of it so-called yen-denominated “Samurai bonds”, and the lack of clarity over how the company’s debts will now be handled has rattled the market for state-linked and supranational borrowers.


Norway is not part of the 27-member EU but has to accept much of the organisation’s legislation due to its membership of the EEA.


In place of Eksportfinans, the government said last week that it will prop up its export industry directly with as much as NKr30bn over fears that the eurozone’s debt crisis and flagging growth will take its toll on Norway’s most important trade partners.


The measure indicates that “the government considers that Eksportfinans lacks the capacity to provide a relevant service to the Norwegian export-finance industry, which is skewed toward industries such as shipping, energy and other industries, which often require large loans”, Moody’s said.

And full letter:


Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
lolmao500's picture

Holy crap! Time to shit your pants (or not)


Report: 3 quakes right underneath Fukushima nuke plant — JNN live camera down immediately after — No word from Tepco, gov't


Ahmeexnal's picture

The MOX rods have broken into the water table.
Worst case scenario has been reached.

Careless Whisper's picture

The Careless Whisper Morning Update & Threadjacking


Jon Corzine Says "No Comment" On Purchase Of Castle In South Of France


Fiat Offers To Buy UAW Shares In Chrysler


US Gov Deports US Citizen To Colombia; No Trial, No Lawyer


Fight Club In Mexican Prison; 31 Dead


Financial Problems; Radio Host & Wife Double Suicide


Wired Magazine Pushes New World Order Agenda With "Dream" Of Global Currency


Chinese Airlines Refuse To Pay EU Scam Of Cap & Trade Tax; Lufthansa Raises Fares


Federal Reserve Bank; We Need "A Government Facilitated REO-To-Rental Program" (pages 11+)


Dr.Vannostrand's picture

Careless -

Thanks for these Threadjacks, they are always great. New user, but been lurking for a while.

Ahmeexnal's picture

Looks more like KAMIKAZE bonds.

??'s picture

Reported on BBG with a straight  face:


Jan. 5 (Bloomberg) -- A report from Federal Reserve Chairman Ben S. Bernanke called the weakness in the housing market a “significant barrier” to U.S. economic health and said Fannie Mae and Freddie Mac (aka the taxpayer) might have to bear greater losses to stoke a broader recovery.



Sardonicus's picture

Apparently nothing matters anymore.

BAC needs to Raise $32B [more than half its current market cap] and C reiterates its a buy. 

Shoots up 5%  LOL


Cdad's picture

One thing is certain: the 13F chasing lemmingrati will promptly jump in these bonds and take them much higher even if absolutely clueless why.

In a market with almost no participants, you can add the Lemming Run to the list of absurd and stupid made up catalysts to make this or that asset jump.  So yes, you can bet a bunch of lemmings will run into the trade.

Lemming Run....January Effect...Cash on the Sidelines...Global Growth...Santa Rally...and on and on.

Quite literally EVERYTHING that comes out of the criminal syndicate Wall Street set is absolute bullshit these days.

PontifexMaximus's picture

Dan Loeb will make money on that position because Moodys has not done it's homework: although there is no implicit state guarantee but Norway will never let EF go down the drain. They have plenty of money and they will do their homework. Beside the fact that EF can survive (and will) on it's own. Time will tell.

oakley88's picture

North North Face Realization sale North Face Men's Realization sale Face coats for North Face Women's Realization sale North Face Vest sale womenare available in stylish, elegant colours that make them look beautiful North Faceapex Bionic Vest sale North Face Denali Vest saleand strikingandat the same time, hideany bad curves.and who said that colours were restricted North Face Down Vest sale North Face Windbreaker sale to women? pink ribbon north facearealsoavailable in different North Face Men's Windbreaker sale North Face Women's Windbreaker sale stylesand colours. Colours like jet black, steel grey, Mens Face Apex Bionic Jackets Black sale Mens Faceapex Bionic Jackets Grey Black sale olive greenand oak brown North Face 3 In 1 sale North Face Men's 3 In 1 sale that your holiday does not turn intoa major health North Face Denali sale etcareavailable. These coats have specially designed cuts that make the wearer lookathleticand tall. North Face Coatsareavailable Mens The North Face Denali Jackets Black sale Mens The North Face Denali Jackets Black Grey sale North Face Denali Hoodie Jackets Womens Black sale North Face Denali Hoodie Jackets Womens Red Grey sale for kidsas well – funky blues, naughty greens,austere greysand rodeo blacks Women's North Face Pink Ribbon Denali sale Womens The North Face Denali Jackets Grey Black sale with capes for boys;and starry black, soft creams, Womens The North Face Denali Jackets Black Red sale shocking pinksand velvety blues for girls.