Japonica Partners & Co., the U.S. investment firm trying to buy as much as 4 billion euros ($5.3 billion) of Greek government debt, extended its tender offer by a month, without saying how many investors have accepted so far.
Japonica will give bondholders until Aug. 30 to take up the offer for the securities, the Providence, Rhode Island-based firm said in a statement today. It’s the second extension since the firm announced its plan at the start of June.
Japonica in July said it would pay a minimum purchase price of 40 percent of the bonds principal amount, prompting hedge funds to question whether anyone will sell because the offer is below current prices. Greece’s 10-year bonds expiring in 2023 are priced at 58.1 cents on the euro, while 30-year bonds are at 42.92 cents, data compiled by Bloomberg show.
The offer was extended to give bondholders interested in selling more time to obtain “independent fairness opinions” to determine the fair value of their Greek debt, Japonica said in the statement. Japonica said it would consider paying as much as half the cost of fairness opinions to reimburse investors who sell their debt at a discount to today’s prices.
Greece is in its sixth year of recession and dependent on bailout funds from European governments to avoid bankruptcy. Hedge funds including Third Point LLC and Greylock Capital Management LLC made money last year by buying the country’s government bonds, betting that European officials would continue to rescue the nation from financial collapse to prevent the region’s debt crisis from spreading.
Japonica, run by former Goldman Sachs Group Inc. (GS) banker Paul Kazarian, is in contact with more than 80 percent of “large block holders” of Greek bonds, Christopher Magarian, the firm’s finance director, said in the statement.
A spokesman for the firm declined to comment on how many investors have accepted the offer so far.
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