In the last few days, it seems that foreign funds have amassed a position of 80-90% of all 2020 Eurobonds, which means my original plan just became much more expensive. It also indicates that diverse smart money is itching for a fight & feel they can win.
One fund amassed >25% in all 3 series (Source: @MichelKozah) giving it a holdout capability in any restructuring. So procrastination & indecision has a price. Instead of costing $783 million to get rid of these guys, it will now cost billions of $ for 2020 alone.
The fact that diverse groups have piled on means it’s no longer just one stubborn fund, but some very smart people have come to the conclusion that they have a better case than our local experts believe. Regardless, the cost of paying or not paying has now increase massively.
The much more expensive cost of paying means that the populist outcry will now increase, but so does the cost of default (or war). This makes the case for default much stronger & I’ll be curious to see how their position evolves.
This situation perfectly illustrates General Patton’s: “A good plan executed violently today is better than a perfect plan in a week.”
