Greece Repays Samurai Bonds

The Greek government repaid a yen-denominated bond due Tuesday, a day after it struck a new bailout deal with its lenders, escaping potential default on commercial debt that could have rattled financial markets.

According to Mizuho Bank, the agent for the 20-year samurai bond, the payment of 11.6 billion yen ($93.87 million) was made on schedule. The Japanese bank is the core banking unit of Mizuho Financial Group Inc.

All eyes had been on whether Greece would be able to meet upcoming debt deadlines after it failed to pay 1.6 billion euros ($1.7 billion) back to the International Monetary Fund at the end of last month.

Rating agencies had warned that they could declare a default should payment to private-sector investors be delayed.

However, with the announcement of a Greek bailout Monday, expectations rose in the market that the government would be able to repay.

Greece still needs to pass some fiscal reforms in its parliament by Wednesday to start negotiations for up to 86 billion euros in aid offered Monday by eurozone leaders, who are also considering providing a bridge loan for near-term repayment.

The 20-year bond was issued in 1995 by the Greek government and the country’s national railway to retail and institutional investors in Japan. Most investors are believed to have sold it to overseas hedge funds, according to a major securities house.

via Mainichi

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza