Liontrust’s Credit Fund is buying European subordinated bank bonds, Reuters reports. The long/short hedge fund has spotted an opportunity in Commerzbank’s tier one bond, which may be inexpensive.
Liontrust buys the subordinated bonds at about 40-50 pence on the pound. It started buying bonds of U.K. banks after the British Treasury changed the terms of the Bradford & Bingley bailout to help it skip coupon payments on its subordinated bonds without defaulting.
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This article was originally published in Alternative Investment News.