F&C’s Niven Says Portugal May Also Seek Debt-Writedown Deal

Portugal may have to follow Greece and impose losses on sovereign bondholders as the debt burden in some euro-area nations is “simply unmanageable,” according to F&C Asset Management Plc

“The market clearly is concerned about private-sector involvement in terms of Portugal,” Paul Niven, head of multi- asset investments at F&C, where he manages 20 billion pounds ($32 billion) directly, said at an event in Lisbon today. “The market doesn’t believe that Portugal can either cut or grow its way out of its problems. I think they are probably right.”

Greece’s government is embroiled in a political battle over new budget cuts that creditors are demanding in return for a second bailout involving bondholder losses. Prime Minister Lucas Papademos is trying to secure a deal to avoid defaulting on a 14.5 billion-euro ($19 billion) bond payment due March 20.

Even if a deal is agreed in Greece, “we are going to be revisiting these issues on an ongoing basis because growth in the periphery is not there,” Niven said. “So the debt burden, unless there is much more significant writedowns of debt, the burden is simply unmanageable.”

To contact the reporter on this story: Henrique Almeida in Lisbon at halmeida5@bloomberg.net

To contact the editor responsible for this story: Angela Cullen at acullen8@bloomberg.net

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.