Michael Hasenstab further cut Irish debt holding in first quarter

Franklin Templeton's Michael Hasenstab, who made billions of dollars investing in Irish bonds, continued to cut his holdings of Irish debt in the first quarter as yields plunged.

The amount of Irish debt held by US- and Luxembourg- registered versions of Mr Hasenstab’s Templeton Global Bond Fund and the Templeton Global Total Return Fund fell 61 per cent to a face value of €1.8 billion during the first quarter, according to figures compiled by Bloomberg from filings.

In the six months through March, the holdings fell by 73 per cent, or by €5 billion.

“Ireland’s economic and financial policy management of the crisis will remain an important model from which other countries can learn,” Mr Hasenstab said in an e-mailed statement.

“It is heartening to see the hard work and sacrifices paying off.”

Mr Hasenstab snapped up Irish government bonds during the financial crisis to become the largest private holder of Irish debt. The fund manager began to build his position in 2011, as the State's benchmark 10-year bond yield reached a euro-era high of 14.2 per cent. The yield has since plunged to 0.73 per cent, aided by European Central Bank President Mario Draghi's quantitative easing programme.

Irish government bonds maturing in 2018 now carry a negative yield, and the State’s debt have returned about 71 per cent since the end of 2011, according to an index compiled by Bloomberg.

Elsewhere, some of Mr Hasenstab's bets haven't paid off as well, with Ukraine negotiating with a group of five creditors, including biggest bondholder Franklin Templeton, as the nation struggles to repay debt.

Bloomberg