BlackRock Buys Greek Debt Seeing Peers too Pessimistic on Prices

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After months of political and financial turmoil pushed sentiment toward Greece’s beleaguered government-bond market to fresh lows, it received a shot in the arm from the world’s biggest money manager.

BlackRock Inc., which oversees about $4.7 trillion, bought Greek debt last week, benefiting from prices that were overly depressed by investor concern that the nation would struggle to implement requirements of its latest bailout deal, according to Michael Krautzberger, head of euro fixed income for the company in London.

“For the more aggressive total-return accounts, we actually bought a tiny bit of Greece a week ago,” Krautzberger said in an interview on Bloomberg Television’s “On The Move” with Jonathan Ferro. “Obviously the headlines didn’t look good, but if you looked at the pricing terms we thought that the pessimism had gone too extreme.”

Krautzberger’s European team manages almost 60 billion euros ($65 billion).

Yields on Greek 10-year bonds and two-year notes have jumped this year. Greece’s sovereign securities overall lost 23 percent in the 12 months through July 17, making them the worst-performing sovereign-debt market in the period as tracked by Bloomberg World Bond Indexes.

The country’s 10-year bonds fell on Monday, with the yield rising 2 basis points, or 0.02 percentage point, to 11.26 percent.

Greece gave the order to repay 6.8 billion euros of debt on Monday, including money owed to its own central bank, as well as to the European Central Bank and the International Monetary Fund, according to a Finance Ministry official who asked not to be identified in line with government policy.

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