When on Tuesday Greece announced that it had made 436 million Euro Bond payment hold out investors who reject the historical debt of the country, revamping transaction in March, the decision came as no surprise. Ultimately, with the Government of Athens in turmoil and investors, wary of having nothing to do with Greece, now will be foul weather to make things worse by ots?stvalata the bond payment.
What is news is where most of that money went. Almost 90% is delivered to the coffers of the Dart, secretive investment fund, based on the Cayman Islands, according to people with direct knowledge of the transaction.
DART is one of the most well known of the so-called vulture funds that have a track record of purchasing of the bonds of the difficulties of the almost bankrupt countries – and if they are not paid, suing the Government for money. DART and other large vulture fund, contact Elliott, enhanced this strategy during the various Latin America debt crisis during the past years.By accumulating the most of these bonds at prices which dealers forecast to be from 60 to 70 cents per dollar, Dart is to heavy profit, which have received 100 cents on the dollar – as a result, may be particularly galling Greek banks and other local institutions, which have been forced to 75 percent loss of Greek Bond Holdings.
Large winning bet of Dart may presage more aggressive tack of vulture funds, if Greece was forced to restructure their debt for the second time.Lynn Smith, spokesman for Dart, said that the firm does not comment on market speculation.
The DART payday and may propose promoting other fortresses among investors, now owned by around 6 billion euro, or bonds, 7.6 billion dollars, in Greek. Another payment is due in September, although for smaller amount.Greek officials insisted Tuesday that the reason to pay largely had to do with the fact that Greece is not Government. But there are afraid that the Dart, or smaller holders of bonds of the same, immediately sued Greece – something that potentially could engage the liquidity of European funds, which is counting on the country to remain in business.
“They caught us weaker time possible,” says Hardouvelis Gikas, Senior Economic Adviser to the Prime Lucas Papademos, who was involved in the decision of the decision-making process. “But this is without prejudice to future decisions on this matter.”Greece is scheduled to take place elections next month. And under the new Government, especially one that may include leading left wing vote-getter, Alexis Tsipras, is confident about the hardening of attitudes to win investors. Not to mention the fact that Greece may default level if Europe finally cut off funds.
In fact, concerns are mounting for subsequent payments, which Greece is obliged to provide the 50 billion euro or that of its bonds held by the European Central Bank.On 18 may, for example, the country must make such payment, worth 3.3 billion euros. For now the liquidity funds are set to meet these obligations. But if these funds are cut, Greece will be in no position to future Bond payments.
Already the decision to pay the Dart and other fortresses is challenging in Greece, not only of the left politicians, but from the market experts to provide that would enrage thousands of young Greek investors who haircuts of their holdings of government bonds.“I think this is a huge error to pay these guys,” says Jason Manolopoulos, Greek hedge fund investor and author of the book the burden of debt of Greece. “This only provides left more ammunition to attack the proevropejskite parties.”
The Fund’s founder is Kenneth Dart Dart, heir to the cup of business billion foam and United States tax exile who lives in Cayman Islands. Dart Fund invests in debt after 1980. DART, along with Elliott Associates, also is suing Argentina, which defaulted on its debt in 2002 Funds looking for up to $ 2 billion in payments from the country by the courts of the United States.
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