Monday, April 1, 2013

The Bailout Of Cyprus Was Another Big Win For Hedge Funds

According to BI: One of the aspects of the Cyprus bank bailout deal hatched by the EU and the Cypriot government in March that has been noted as a big positive by analysts across Wall Street is the fact that it won't hurt the sovereign's creditworthiness in the same way it would if deposits weren't used to fund the bailout.

Restructuring experts Lee Buchheit of Cleary Gottlieb and Mitu Gulati of Duke Law School put it this way: Cypriot sovereign bonds will emerge unscathed.  The next bond maturing on June 3, 2013 in the amount of €1.4 billion – a large chunk of which is reputed to have been bought by international hedge funds over the last six months at prices ranging from 70-75 cents on the euro – will be paid out at 100 cents on the euro in about ten weeks.

Hedge funds luck out in this case. They own "around half" of the June 2013 bonds, according to IFR reporters Natalie Harris and John Geddie...

Read all about it at

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