Rhode Island Firm Makes Unusual Bid to Buy Greek Sovereign Debt

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Greece
The Greek flag (right) is waving a bit more shakily as monetary problems mount.

A private Rhode Island firm is offering to take Greek government bonds off the hands of some investors, in what it hails as the first ever private tender for European government bonds.

A wholly owned subsidiary of Japonica Partners & Co. will buy bonds issued by Greece in 2012 from certain institutional investors for 26.5 percent more than what the Greek government offered in its December 2012 bond buyback scheme, according to a Monday press release.

Japonica will buy up to 2.9 billion euros ($3.77 billion), which is slightly less than 9.9 percent of the total 29.6 billion euros in value held by outstanding Greek bonds.

“Japonica believes that the market for Greece government bonds is volatile, highly illiquid, and at any time not necessarily reflective of their intrinsic value,” reads the press release.

A Japonica spokesperson added: “It is Japonica’s goal to align its investment interests with those of Greece.” Japonica didn’t immediately respond to requests for comment.

The news release adds that Japonica’s buying price represents a 15.2 percent premium on the selling price of the Greek bonds in late March. The firm is willing to pay at least 45 percent of the face value of bonds.

There hasn’t yet been a reaction or comment from the Greek government on Japonica’s offer, according to Iris Yennimata, a Greek communications specialist working for Japonica.

Japonica’s founder and CEO, Paul Kazarian, is a former Goldman Sachs banker, according to the Financial Times’ Alphaville blog.

According to Japonica’s website, it’s an “entrepreneurial investment firm that makes concentrated investments in underperforming global special situations.” The firm emphasizes that it is not a fund, and states that it does not provide investment advice.

“We have consistently discovered value where leading asset managers and world class companies have walked away,” reads their website, in describing their business niche.

According to the company, it held key shareholder stakes in Allegheny International, Sunbeam-Oster, Inc. and CNW Corp, which it helped reorganize and restructure.

According to a June 1990 article from the Pittsburgh Post-Gazette, Allegheny’s lenders sued Japonica in bankruptcy proceedings, accusing Japonica of violating bankruptcy laws in trying to remake Allegheny’s executive leadership.

The deadline for prospective sellers to approach Japonica with an offer is July 1, 2013. The firm will issue a memo with more details on the sale on Wednesday.

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