Tags: BlackRock | Greek | EU | Bonds

BlackRock Buys Greek Bonds, Bets on EU Rescue

By    |   Friday, 19 Feb 2010 02:21 PM

BlackRock, the world’s biggest money manager, is snapping up Greek bonds, betting that the European Union will protect the country’s government from default.

EU leaders have pledged to assist Greece in dealing with its huge debt burden.

“They won’t allow a Lehman-type crisis,” Michael Krautzberger, co-head of BlackRock’s European fixed-income division, told Bloomberg.

“The market has worried too much about an imminent government default in Europe that will not happen because of the solidarity.”

The firm is undeterred by the fact that Greece’s budget deficit totals 12.7 percent of GDP. BlackRock has an overweight position in the bonds and may continue that stance for “some time,” Krautzberger said.

He believes the EU will be successful in helping Greece to deal with its troubled finances.

“There’s still potential for Greek bond yields to fall further now that it’s clear the EU is thinking of measures to deal with the problem,” Krautzberger said.

“The plan might not be very specific yet, but there’s no doubt at this point they stand ready to help.”

Krautzberger’s bullishness on Greek bonds also stems from their cheap price compared to other EU countries’ bonds.

Not everyone is so optimistic about Greece. Some say its trouble spells doom for the euro.

"The euro's going to weaken – it's still going to be under pressure for the next four or five weeks," David Bloom, head of foreign exchange research at HSBC told the London Guardian.

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BlackRock, the world s biggest money manager, is snapping up Greek bonds, betting that the European Union will protect the country s government from default. EU leaders have pledged to assist Greece in dealing with its huge debt burden. They won t allow a Lehman-type...
BlackRock,Greek,EU,Bonds
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2010-21-19
Friday, 19 Feb 2010 02:21 PM
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