HEDGE funds are positioning to profit from a plan to slash Greece’s towering debt pile as Athens enters final talks that could sway the country's membership of the euro.
York Capital, the $14bn fund part-owned by Swiss banking giant Credit Suisse, New York-listed Och Ziff , and $10bn-strong Marathon Asset Management are among those who collectively may have built up sufficiently large positions to scupper the bailout deal, several sources close to the debt restructuring said.
The deal asks creditors to voluntarily write down 50 per cent of the notional value of their bond holdings. But hedge funds may opt out, hoping that Athens will let them get away with it to save itself political embarrassment.
“I think we’ll hold out. People are so slow in Europe and by the time they’ve got everything in place logistically this might be the one window where investors might be paid back in full,” said one hedge fund manager who owns Greek bonds.
The stakes for Greece are high. Without the deal, the international lenders will not bail Athens out a second time, which means it will likely default around 20 March, when a €14.5bn bond falls due.