An agreement to extend the maturity of Greek sovereign debt would be a favorable outcome for bond investors, Loomis Sayles & Co. Vice Chairman Dan Fuss said.
“It is the most favorable, reasonable outcome from a bondholder’s view,” Fuss said in an interview in London today. Boston-based Loomis Sayles manages $156 billion. Fuss, 77, said he wouldn’t object to extending Greek debt, “not if you don’t mark it down.”
The Greek economy has to start growing to resolve the nation’s economic crisis, Fuss said. “The only way to deal with it is to grow,” he said.
European Central Bank and European Union policy makers are clashing over how to prevent the currency region’s first default. ECB Governing Council member Christian Noyer ruled out a restructuring of Greece’s debt, calling it a “horror story” that would leave the nation shut out of financing for years.
“The lengthening of maturities raises very difficult questions,” Noyer said today. “There’s a strong chance it will be the equivalent of a default.”
European Union finance ministers on May 16 floated the idea of talks with bondholders over extending Greece’s debt-repayment schedule, saying the bailout has failed to restore the country’s financial health. On May 20, Fitch Ratings cut Greece’s credit rating to B+ from BB+, saying that extending its debt maturities would “trigger a credit event and default rating.”
Fuss also said Loomis Sayles will open an office in London this year to be closer to U.K. clients. Loomis Sayles will initially have seven employees including analysts in the office, which will be overseen by Jeff Seaver, Fuss said.