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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:

 

 

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Thu, 01/05/2012 - 12:49 | 2035807 lolmao500
lolmao500's picture

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

http://enenews.com/report-shallow-quake-right-underneath-fukushima-nuke-...

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

 

Thu, 01/05/2012 - 12:50 | 2035820 Ahmeexnal
Ahmeexnal's picture

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

Thu, 01/05/2012 - 12:53 | 2035834 Careless Whisper
Careless Whisper's picture

The Careless Whisper Morning Update & Threadjacking

 

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

http://www.nypost.com/p/pagesix/jon_craved_french_chateau_3jOHsxI57aAEsw...

Fiat Offers To Buy UAW Shares In Chrysler

http://www.detroitnews.com/article/20120105/AUTO01/201050399/Fiat-meets-...|topnews|text|FRONTPAGE

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

http://www.nydailynews.com/news/national/texas-runaway-found-colombia-mi...

Fight Club In Mexican Prison; 31 Dead

http://www.cbsnews.com/8301-202_162-57352622/mexican-prison-knife-fight-...

Financial Problems; Radio Host & Wife Double Suicide

http://www.azfamily.com/news/Valley-radio-personality-Bill-Heywood-found...

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

http://www.wired.com/magazine/2011/12/st_essay_globalcurrency/

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

http://www.dw-world.de/dw/article/0,,15647594,00.html

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

http://www.federalreserve.gov/publications/other-reports/files/housing-w...

Thu, 01/05/2012 - 14:33 | 2036211 Dr.Vannostrand
Dr.Vannostrand's picture

Careless -

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

Thu, 01/05/2012 - 12:50 | 2035816 Ahmeexnal
Ahmeexnal's picture

Looks more like KAMIKAZE bonds.

Thu, 01/05/2012 - 12:53 | 2035827 ??
??'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.

 

http://www.businessweek.com/news/2012-01-05/fed-report-says-fannie-fredd...

Thu, 01/05/2012 - 12:51 | 2035825 Sardonicus
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

http://www.thestreet.com/_yahoo/story/11366593/1/bank-of-americas-gaping...

Thu, 01/05/2012 - 12:55 | 2035850 Cdad
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.

Thu, 01/05/2012 - 15:31 | 2036391 PontifexMaximus
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.

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oakley88's picture

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