About a month ago, Greece barred hedge funds from participating in their new bond sale.
The government held a €5bn Greek bond issue in early March which they tried to use as an opportunity to punish hedge funds for betting against them.
They were looking to keep the bonds strictly in buy-and-hold territory, so they told the banks handling the sale: no hedge funds or anything that could be a hedge fund in disguise (like a buyer that that might have been hired to act in proxy for a hedge fund).
Big mistake. Huge.
Turns out, Greek authorities were seriously overestimating the popularity of their bonds. We’re not entirely sure about the numbers but the Telegraph says the Greek bond sale hoped to raise $5 billion to $10 billion and it is attracting only enough buyers to raise $3bn.
Anthony Peters, a strategist at Swissinvest, told the Telegraph: “The Greeks have to wake up and understand where they rank in the hierarchy of borrowers. There is a wall of sellers at the moment and no buyers.”
Now they will probably have to accept hedge fund orders.
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