OTE BONDS (UPDATE)

3 months of summer have passed quickly. Nothing new really happened in the world except for continuous general worry and unshaken trust in central banks. We are muddling through and may continue this for many years.

Since the last time, OTE bonds were not a bad investment. As a % to par, it grew by ~25% in 3 months but stock almost doubled (in USD terms, note that numbers below are in EUR). Interestingly, the longest maturity bonds increased only 17%.

Maturity	Size, EUR	Coupon	YTM (05/30)	YTM (08/30)	Price of par (05/30)	Price of par (08/30)	Delta
2016/05	900m	4.625%	23.2%	18.9%	55.0%	64.2%	16.7%
2015/02	600m	6.000%	36.3%	23.8%	56.5%	71.5%	26.5%
2014/08	500m	7.250%	41.9%	27.6%	60.5%	76.0%	25.6%
2013/03	1,243m	5.000%	44.0%	22.5%	69.0%	86.6%	25.5%

Back in May my bond money allocation was in a much lower risk 9% return product (EUR deposit at a major Swedish bank) which is maturing soon, consequently, I will have my eyes open in September when supposedly Greek (or even EUR) “solution” will or will not be found. I do not think that odds justify betting a farm on this but a 5-15% position may have its merit.

Just for information purposes…

For convenience: Link to OTE / devaluation and Link to the original note.

Disclosure: no position.