Sections

Greek intervention bonds JP Morgan deal

GREECE - JP Morgan and the four pension funds involved in the disputed bond deal have reached a buy-back agreement.

The pension funds agreed to the re-purchase offer by JP Morgan and hedge fund manager North Asset Management on Friday evening after the Greek government promised to pay for any interest gained on the bond investment.

"At long last, good sense has prevailed among the pension funds' managements, and we are pleased to announce that we have received commitments in principle from all of them to proceed with our proposed offer," JP Morgan said in a statement.

"We will endeavour to work with each of them to ensure their completion of the necessary documentation and regulatory approvals required."
 
JP Morgan had seen its buy-back deal for €280m worth of structured bond products rejected twice over the last months as the four pension funds, which allegedly paid around €5m too much for the bonds, wanted the full purchase price as well as keep the interest gained on the investment in the meantime - estimated at around €2.9m.

The concluded deal might help ease pressure put on the government by opposition parties and other critics to call early elections. But the ruling conservative New Democracy (ND) party under Costas Karamanlis had stressed it will remain in office until the end of its term next March.

The disputed bond purchase has so far led to the government setting up an inquiry commission, the closure of the Athens brokerage Acropolis and the resignation of the manager of one of the funds involved, Agapios Simeoforidis of the Greek Civil Servants' Auxiliary Fund (TEADY).

Furthermore, the government introduced new restrictions for pension fund investment which will lead to capping exposure to structured bond products.

Have your say

You must sign in to make a comment

IPE QUEST

Your first step in manager selection...

IPE Quest is a manager search facility that connects institutional investors and asset managers.

  • QN-2474

    Asset class: All/Large Cap Equities.
    Asset region: Global Developed Markets.
    Size: $150m.
    Closing date: 2018-09-25.

Begin Your Search Here