Samaras did heavy homework before bond sale

This mini road show paved the way for a 3 billion-euro ($4.2 billion) offering that drew orders for almost seven times that amount. While the nation remains blighted by deflation and the highest unemployment in Europe, the sale underscored Greece’s strengthening ties across the euro area as it seeks to overcome the stigma of starting a region-wide financial crisis and carrying out the biggest-ever restructuring.

“This trade is not without risk,” Mark Nash, a London-based money manager at Invesco, which oversees $787 billion including $177 billion of fixed-income assets, said in a telephone interview on April 17 after buying the new government notes. “It relies on European growth continuing to improve. The fundamentals in Greece are not terribly rosy, but there’s no doubt they are doing a lot better.”

Greek bonds returned more than 400 percent since June 2012, the month Samaras came to power, according to Bloomberg World Bond Indexes, more than any technology stock in the Standard & Poor’s 500 Index. Ten-year Greek yields touched the lowest level since February 2010 this month and Samaras said in an interview in Athens last week that he expected rates to continue falling and that his country was in no rush to tap the markets again.

Still, not all investors were convinced Greece’s progress has come far enough to warrant yields below 5 percent on the notes. Insight Investment Management Ltd., Kleinwort Benson Bank, Natixis Asset Management and Skagen AS, which together oversee almost $900 billion, were among investors that shunned the sale.

Greece lost a quarter of its economic output during a six-year recession, unemployment is just shy of 27 percent and consumer prices fell 1.5 percent in March from a year ago. The country’s debt pile was 175.1 percent of gross domestic product in 2013, up from 157.2 percent a year earlier, the European Union’s statistics office in Luxembourg said yesterday.

These were among the concerns Samaras faced at the investor meeting in New York in September. The Greek prime minister had already met with Dimon in August, when he was in the U.S. to meet President Barack Obama, according to a person with knowledge of the matter.

JPMorgan’s Dimon, whose paternal grandfather migrated to the U.S. after working as a banker in Athens, kicked off proceedings at the September meeting with supportive words for Samaras and his efforts to turn Greece around, according to one of the people familiar with the events. Samaras then made his case to the money managers in attendance on why they should invest in the nation.