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Shut out of international bond markets for four years, Greek Prime Minister Antonis Samaras wasn’t going to take any chances with his country’s return.

He began months ago lining up investors for the April 10 debt sale, which proved irresistible to the likes of BlackRock Inc. and Invesco Ltd. The keystone for his pitch was a September meeting with investors at JPMorgan Chase Co.’s headquarters in Manhattan hosted by Chief Executive Officer Jamie Dimon, according to two people with knowledge of the matter, who asked not to be identified because the event was private.

The charm offensive paved the way for a 3 billion-euro ($4.2 billion) offering that drew orders for almost seven times that amount. While the nation remains blighted by deflation and the highest unemployment in Europe, the sale underscored Greece’s strengthening ties across the euro area as it seeks to overcome the stigma of starting a region-wide financial crisis and carrying out the biggest-ever restructuring.

“This trade is not without risk,” Mark Nash, a London-based money manager at Invesco, which oversees $787 billion including $177 billion of fixed-income assets, said in a telephone interview on April 17 after buying the new government notes. “It relies on European growth continuing to improve. The fundamentals in Greece are not terribly rosy, but there’s no doubt they are doing a lot better.”

Greylock, BlackRock

Joining Invesco among the buyers of the new five-year securities were New York-based Greylock Capital Management LLC, which oversees $850 million, and Legal General Investment Management, with the equivalent of $758 billion.

BlackRock, the world’s largest money manager with $4 trillion in long-term assets, also invested in the notes, according to a person familiar with the matter. Brian Beades, a spokesman for the New York-based firm, declined to comment when contacted April 21.

Greek bonds returned more than 400 percent since June 2012, the month Samaras came to power, according to Bloomberg World Bond Indexes, more than any technology stock in the Standard Poor’s 500 Index. Ten-year Greek yields touched the lowest level since February 2010 this month and Samaras said in an interview in Athens last week that he expected rates to continue falling and that his country was in no rush to tap the markets again.

Expressing Confidence

Having carried out the sale via banks including JPMorgan, rather than at an auction, to help ensure demand, Greece agreed to a yield of 4.95 percent on the securities. It received bids exceeding 20 billion euros, enabling the nation to raise more than the 2.5 billion euros it initially sought, Samaras said in a televised address that day.

Almost half the debt went to investors based in the U.K. and a third was allocated to those from the rest of Europe, according to a statement from the Athens-based Finance Ministry.

“International markets are now expressing in the most undoubted way possible their confidence in the Greek economy,” Samaras, 62, said in the televised comments.

The timing of the sale enabled Greece to tap into a rally across the euro area that’s driven governments’ borrowing costs to record lows.

The average yield to maturity on debt from Greece, Ireland, Italy, Portugal and Spain fell to 2.19 percent yesterday, the lowest since at least 1998, according to Bank of America Merrill Lynch indexes. The yield climbed as high as 9.55 percent in 2011 as the sovereign-debt crisis threatened to blow the currency bloc apart. A measure of all euro-area government bonds reached a record-low yield of 1.55 percent last week.

Draghi Pledge

Investors started to return to markets they shunned during the region’s debt crisis after a July 2012 pledge by European Central Bank President Mario Draghi to do whatever was needed to keep the currency bloc together. Adding to the case for a recovery, Europe’s policy makers have put in place new systems that centralize bank supervision and build firewalls between troubled debtors and taxpayers.

Now bondholders are speculating the ECB will either tolerate inflation that’s slowed to a four-year low, preserving the purchasing power of the fixed payments on bonds, or unleash a debt-purchase program to fend off the risk of deflation.

“It will eventually get to the stage where the market demands some affirmative action rather than just the rhetoric” from the ECB, Richard Hodges, a fixed-income money manager at Legal General in London, said in a phone interview on April 14. This “seems to have driven some of the periphery to the levels at which they are today,” he said, referring to the region’s high-debt and deficit nations.

Buying Bonds

Hodges bought about 30 million euros of the new five-year Greek bonds for the Legal General Dynamic Bond Trust (LGDNBAA) he runs, he said. That amounts to about 1 percent of the fund and, while other money managers at Legal General also bought the securities, this was the largest purchase, he said. His fund returned 11 percent in the past five years and is in the 94th percentile of its peers, data compiled by Bloomberg show.

Demand for Greece’s notes was led by “real money investors,” or those that use existing funds rather than borrowed cash for the investments, according to the Finance Ministry. Asset managers purchased 49 percent of the debt and hedge funds bought 33 percent, it said. Pension and insurance funds were allocated 4 percent and banks took 14 percent.

Quick Exit

The yield on the new April 2019 notes climbed to 5.16 percent on April 14 before falling to 4.82 percent at 10:50 a.m. London time today.

Frankfurt-based ACATIS IfK Value Renten UI (ACIFKVR) sold the 3 million euros of notes it bought in the first hour of trading on April 11 at 4.85 percent, making a “small profit,” according to Martin Wilhelm, who helps manage about 400 million euros for the fund.

“We still own about 7 million euros of the 2029 bonds,” he said in a phone interview on April 17. “It is better to buy Greece than buy Spain, as they carry about the same story.”

Greek government securities returned 30 percent this year through April 22, more than double the next-best performance among the 34 sovereign markets tracked by the Bloomberg World Bond Indexes, extending their world-beating returns into a third year. Spain’s earned 7 percent.

The yield on the Greek benchmark 10-year bond was at 6.09 percent today, having fallen from more than 8 percent at the start of the year. The price of the 2 percent securities maturing in February 2024 was at 79.635 cents on the euro, up from 25.5 when they were created under the 2012 debt restructuring that saw investors accept losses of more than 100 billion euros.

Spain, Germany

Spain’s 10-year rate was at 3.06 percent, having fallen to 3.039 percent yesterday, the lowest since 2005. Ten-year German bunds, Europe’s benchmark government debt, yielded 1.53 percent.

Greece, the country that sparked Europe’s debt crisis in 2009 after saying its deficit was bigger than previously thought, hadn’t sold bonds since March 2010.

In April 2010, then-Prime Minister George Papandreou called for the activation of a financial lifeline for the nation, an unprecedented test of the euro’s stability.

In total, Greece received 240 billion euros in aid commitments under two financial rescues. The country persuaded bondholders to swap existing securities for new bonds maturing between 2023 and 2042, resulting in a 53.5 percent writedown of their holdings, under the 2012 restructuring.

No Thanks

Not all investors were convinced Greece’s progress has come far enough to warrant yields below 5 percent on the notes. Insight Investment Management Ltd., Kleinwort Benson Bank, Natixis Asset Management and Skagen AS, which together oversee almost $900 billion, were among investors that shunned the sale.

“The pricing was not attractive on the basis of volatility,” Fadi Zaher, the head of bonds and currencies at Kleinwort Benson Bank in London, which oversees $8.9 billion, said in an April 15 interview. “We buy to hold for some time and my biggest fear was that there would be a lot of hot money coming into this deal, which will leave after the issue.”

Greece lost a quarter of its economic output during a six-year recession, unemployment is just shy of 27 percent and consumer prices fell 1.5 percent in March from a year ago. The country’s debt pile was 175.1 percent of gross domestic product in 2013, up from 157.2 percent a year earlier, the European Union’s statistics office in Luxembourg said yesterday.

“The challenges are extremely large,” Axel Botte, a Paris-based fixed-income strategist at Natixis, said in an April 15 interview. “The 2019 bond came in below 5 percent, which clearly understates the credit risk of Greece. We will shy away from buying Greek bonds at this stage.”

Samaras Concerns

These were among the concerns Samaras faced at the investor meeting in New York in September. The Greek prime minister had already met with Dimon in August, when he was in the U.S. to meet President Barack Obama, according to a person with knowledge of the matter.

JPMorgan’s Dimon, whose paternal grandfather migrated to the U.S. after working as a banker in Athens, kicked off proceedings at the September meeting with supportive words for Samaras and his efforts to turn Greece around, according to one of the people familiar with the events. Samaras then made his case to the money managers in attendance on why they should invest in the nation.

“It is in everyone’s best interest to help Greece recover and thrive, and we at JPMorgan are pleased to do our part,” Dimon, 58, said in an e-mailed statement two days ago. The Greek prime minister’s office wasn’t available for comment yesterday.

Good Relations

Samaras stressed at the meeting that relations were good with the ECB, the International Monetary Fund and the European Commission, whose rescue funds saved Greece from collapse. Continued good standing with the group, known as the troika, is pivotal to the country making its bond payments.

The country won approval this month from euro-area members for an 8.3 billion-euro aid payment, the first disbursement from its bailout program since December. The European Commission forecasts that Greece’s gross domestic product will expand 0.6 percent in 2014 after six consecutive years of contraction.

Greece recorded a primary budget surplus, which excludes interest and one-time payments, of 1.5 billion euros last year, the European Commission said yesterday. Euro-area finance ministers said in November 2012 that when the government in Athens registered a surplus, they would “consider further measures and assistance” to help Greece meet the targets set out in its rescue-aid agreement.

‘Big Believer’

Greylock Chief Executive Officer Hans Humes says he took part in the sales process, betting Greece’s economic recovery would continue. His hedge fund was among those that made money by buying Greek bonds in 2012 on speculation that European officials would prevent the euro-area debt crisis from spreading.

“We have been a big believer in the reforms and the fact that the economy has turned around,” Humes said in a phone interview on April 21. “Given the fact we’ve been so tied into the story, and we’re so supportive of what Greece is doing, of course we’re going to be coming in with a relatively large order.”

While the company has been trimming its holdings of Greek bonds since last year after the prices increased, it would “probably participate” in future offerings and has also looked at Greek corporate debt, Humes said.

Confidence Surge

National Bank of Greece SA, the country’s biggest lender, is selling five year notes that may be priced today and yield between 4.5 percent and 4.625 percent, according to a person familiar with the matter, who asked not to be identified. It will follow Piraeus Bank SA, which last month held the first public sale of debt by a Greek financial company since 2009, according to data compiled by Bloomberg.

Eurobank Ergasias SA, Greece’s third-biggest lender by assets, will seek to sell 2.86 billion euros of shares before the end of the month to plug a capital hole identified in an asset quality review, it said last week. Piraeus Bank and Alpha Bank A.E. last month raised nearly 3 billion euros, mostly from foreign investors, to bolster capital.

The return of confidence is being reflected in the freshly relaid marble paving stones on Syntagma Square, Athens, the site of pitched battles between police and protesters during the worst of Greece’s crisis. Finance Minister Yannis Stournaras said he replaced in February a window of his office that had been damaged by a bullet in one of the riots, judging that the era of upheaval had ended.

Still Buying

The investor rush for the sovereign bonds sold this month left some, including Sturgeon Capital, unable to buy the notes.

“To come in the market and pay close to 5 percent is a good first step,” Yannick Naud, a London-based money manager at the fund, which manages $190 million in assets, said in an April 15 interview. “We see continuous inflows into euro-zone periphery, and within the euro zone from core to periphery, as investors are chasing yield. I’m convinced we will see some new issues from Greece at shorter maturities, where the yield will be much lower.”

When prices on the newly issued debt dropped in the aftermath of the sale, Invesco’s Nash bought more.

“There’s a lot of demand for sovereigns at the moment and, quite simply, the yields on offer are very low,” he said. “It’s all relative. You’re getting very little elsewhere, so we do like this trade at the moment. But if we see anything jeopardizing it, we would look to exit.”

To contact the reporters on this story: Jesse Westbrook in London at; Eshe Nelson in London at; Nikos Chrysoloras in Athens at

To contact the editors responsible for this story: Paul Dobson at Nicholas Reynolds

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Greece met the budget goal its
euro-area partners set as a condition for discussing further
debt relief.

The government of Prime Minister Antonis Samaras recorded a
primary budget surplus, which excludes interest and one-time
payments, of 1.5 billion euros ($2.1 billion) last year, the
European Commission said today.

The result is “well ahead of the 2013 target, which was
for a balanced primary budget as set out in the economic
adjustment program, and is a reflection of the remarkable
progress that Greece has made in repairing its public finances
since 2010,” commission spokesman Simon O’Connor told reporters
in Brussels.

Achieving a primary surplus is a crucial step in Greece’s
recovery after its debt sparked turmoil across the euro area
four years ago. Euro-area finance ministers said in November
2012 that when the government in Athens registered a surplus,
they would “consider further measures and assistance” to help
Greece meet the targets set out in its rescue-aid agreement.

That deal foresees a debt-to-gross domestic product ratio
“substantially lower” than 110 percent in 2022. Separate data
today showed Greece’s debt pile reached 175.1 percent of GDP in
2013, a euro-era record.

“We are of the view that Greece’s debt is sustainable,
provided of course that full program implementation continues
over the coming years,” O’Connor said.

Bank Aid

The primary surplus, equivalent to 0.8 percent of GDP, is
based on a headline deficit of 12.7 percent of GDP. The
commission then excluded interest payments of 4 percent and
other payments, mainly one-off bank support, of 9.5 percent.

Samaras has said that 525 million euros of the surplus will
be used to help “those worst hit by the crisis.” About 30
percent will be used to pay down debt and the remainder will pay
for state arrears.

“We expect by the year 2015 that we will have not simply
primary surplus, but that we’re going to have a fiscal
surplus,” Samaras said in an interview last week. “This means
we will be able on our own to pay our debt, without borrowing at
all. There are very few European countries that are doing this

Seeking to bolster a shaky two-party coalition government,
Samaras is keen to obtain a political reward for his cost-cutting measures before European legislative elections next
month and wants the euro area to offer debt relief. This could
include the extension of loan maturities and a further reduction
of interest rates, EU Economic and Monetary Affairs Commissioner
Olli Rehn has said.

Debt Relief

While euro-area finance ministers could kick-start
discussions on debt relief for Greece at their next meeting on
May 5, O’Connor said today that the matter will probably not to
be taken up until the second half of the year.

Today’s announcement comes four years to the day since
former Prime Minister George Papandreou used a televised address
to call for a financial lifeline to bolster Greece’s fragile
economy. Since then, Greece has gone through the world’s biggest
sovereign-debt restructuring and has received 240 billion euros
in aid commitments. To receive payments, the country has faced a
series of economic conditions including labor-market reforms and
budget goals.

“We live in a country with a surplus of poverty, misery
and hypocrisy,” Nikos Chountis, a European Parliament lawmaker
from the coalition of the radical left, Syriza, Greece’s main
opposition party, said in a statement.

Bond Sale

In recent weeks, Greece’s recovery has gained momentum. The
government held its first bond sale in four years earlier this
month and forecasts it will emerge from a six-year recession
this year after six years of contraction. Its debt pile is still
the highest in the 18-nation euro bloc.

“The surge in public indebtedness since Greece’s fiscal
crisis erupted in 2009 is staggering,” said Nicholas Spiro,
managing director of Spiro Sovereign Strategy in London. “The
fact that, technically speaking, it’s still debatable whether
Greece is solvent says much about the management of its

Today’s data from the EU’s statistics agency in Luxembourg
also confirmed that other fragile euro-area economies are still
struggling to control debt levels even as recovery across the
currency region takes hold. Italy’s debt mountain increased and
remained as the second highest in the euro area after Greece,
going up to 132.6 percent of GDP in 2013 from 127 percent the
previous year.

Debt Crisis

Portugal, in third place, saw its debt rise to 129 percent
of GDP from 124.1 percent, while in Ireland, next in line, debt
rose to 123.7 percent from 117.4 percent. Both countries
received international bailouts at the height of the euro

The data also show that some euro-area countries are
struggling to reduce their budget deficits to with the EU’s 3
percent of GDP limit. France, the region’s second-biggest
economy, posted a deficit of 4.3 percent, down from 4.9 percent.
Spain recorded a deficit of 7.1 percent last year, narrowing
from 10.6 percent the year before.

To contact the reporter on this story:
Ian Wishart in Brussels at

To contact the editors responsible for this story:
Alan Crawford at
Patrick Henry, Ben Sills

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Είκοσι ημέρες πρίν από τις εκλογές Φώτης Κουβέλης και Γιώργος Παπανδρέου θα βρεθούν και θα συζητήσουν μαζί την Δευτέρα στην παρουσίαση του βιβλίου της Μαριλένας Κοππά με τίτλο «Το Αύριο Αργεί Πολύ: για τη Σοσιαλδημοκρατία και την έξοδο από την κρίση».

Η κοινή εμφάνιση δεν είναι τίποτε άλλο από ξεκάθαρη στήριξη της ΔΗΜΑΡ στις εκλογές από τον Γιώργο Παπανδρέου.

Να σημειώσουμε ότι ο Γιώργος Παπανδρέου δεν έχει κάνει καμμία κοινή εμφάνιση με τον Βαγγέλη Βενιζέλο ούτε έχει παρευρεθεί σε εκδήλωση της ΕΛΙΑΣ.

Όσο για την Μαριλένα Κοππά η οποία κατεβαίνει υποψήφια στις ευρωεκλογές με την ΔΗΜΑΡ, δεν είναι ένα τυχαίο πρόσωπο, αφού ήταν επικεφαλής των ευρωβουλευτών του ΠΑΣΟΚ την περίοδο της πρωθυπουργίας του Γιώργου Παπανδρέου η οποία πριν κατέβει με την ΔΗΜΑΡ είχε πολλές φορές αντιπαρατεθεί δημόσια με τον Βαγγέλη Βενιζέλο.

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