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Norway’s Sovereign Wealth Fund Changed its Course on Greek Debt

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UPDATE – January 28, 2015: Standard & Poor’s is considering downgrading Greece’s credit. The ratings agency is concerned whether Greece can continue to service its debt.

Correction: Originally the article mentioned NBIM buying large swaths of Greek debt in 2010. NBIM had a position in Greek debt and since December 2008, the value of the fund’s holdings in Greek debt and amount has decreased dramatically since then. Second note, the value exchanged was less than 2 million NOK.

Norway’s sovereign wealth fund had a position in Greek government bonds before 2007. Bond shops like PIMCO back in 2010 still viewed Greece as too risky, seeing an eventual default or debt restructuring. In March 2012, the sovereign fund’s investments in euro-denominated Greek government bonds were exchanged for new bonds issued by the Greek government and the European Financial Stability Facility (EFSF) as part of a restructuring of Greece’s debt. Norges Bank Investment Management (NBIM), the manager of Norway’s sovereign wealth fund, voted no to the Greek debt restructuring. NBIM opposed the special treatment given to certain bondholders, being subordinated to the European Central Bank (ECB).

The deal left a sour taste in NBIM’s mouth and other bondholders. [ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

SWFI First Read, January 16, 2018

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BP Plans to Take $1.7 Billion Charge to End Legal Claims on Deepwater Horizon

BP Plc is planning to take a US$ 1.7 billion charge to end legal claims regarding the disastrous 2010 Deepwater Horizon spill in the Gulf of Mexico.

Ethereum Co-Founder Leaves Fenbushi Capital

Vitalik Buterin, a co-founder of Ethereum, which is a cryptocurrency, exited China-based Fenbushi Capital. Fenbushi Capital was formed in 2015. Buterin is retaining his role as an advisor of Fenbushi Capital. Buterin dropped out of the University of Waterloo in 2014 when he got a Thiel Fellowship. This permitted him to work on Ethereum full time.

Kingdom Holding Sells Four Seasons Beirut Hotel Stake

Saudi Arabia’s Kingdom Holding sold its position in the Four Seasons Hotel in Beirut for roughly US$ 100 million. Blominvest, a unit of Blom Bank, advised on the transaction. The Four Seasons will continue to manage the property.

Mercer Signs Deal to Buy BFC

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Deutsche Bundesbank to Slowly Add Renminbi into Foreign Reserve Mix

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Deutsche Bundesbank’s executive board made a decision to invest in Chinese renminbi in the summer of 2017 as part of its foreign currency reserves. The German central bank on January 15, 2018, confirmed it will start investing in Chinese renminbi and also consider investing in additional foreign currencies. The move mimics the European Central Bank (ECB), which already considers the Chinese renminbi as a reserve currency. [ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

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Bpifrance, CDB and Cathay Capital Launch Third Cross Border Fund

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Bpifrance, China Development Bank Capital Co., Ltd. (CDB Capital) and Cathay Capital agreed to launch Sino French Midcap Fund II. This is the second fund the group is launching after the €500 million Sino French Midcap Fund I from June 27, 2014. [ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

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