French insurance group Axa stopped buying Italian and Spanish bonds several months ago but has not sold those it owned already, chief risk manager Jean-Christophe Menioux said on Wednesday.
“We froze our investments in (bonds issued by) Italy and Spain a few months ago, as we did a few years ago regarding Greece,” Menioux told a conference in Preignac, southwestern France.
Financial market pressure on Italy and Spain has risen sharply as institutional investors worry about the state of those countries’ balance sheets, with analysts debating the cost of possibly huge bail-outs.
The interest rates that Rome and Madrid must offer to obtain longer-term loans on global equity markets have climbed above six per cent and in the case of Spain, are close to a “tipping point” at which Greece and others had to seek international rescue packages.
Menioux stressed Wednesday that Axa had not sold the Italian and Spanish bonds it owned already, though it has liquidated its portfolio of Greek debt.
In early March, private creditors agreed to cut the value of the debt owed them by Athens by an unprecedented 107 billion euros, roughly half the total amount.
As of January 31, the French insurer indicated that it owned Italian bonds with a market value of 15.1 billion euros, and Spanish bonds worth 8.1 billion. Axa continued to buy French debt, the insurer’s chief risk manager said.
Preignac, France, May 30, 2012 (AFP)
