Japonica Firms Says “Greece is A+”

Japonica Says Greece Deserves A+ Rating

NEW YORK- Japonica Partners, a Providence, RI-based investment firm took out a full page advertisement in the November 26 edition of the New York Times to call attention to economic progress Greece has been making and which it suggests is not being taken into account by policymakers and the media.

The open letter, which presumably will be published in other major newspapers, was topped by the eye-catching headline: “Greece is A+”

Paul B. Kazarian, 57, is the Founder, Chairman and CEO of Japonica, which was established in 1988. He usually flies under the media radar, but he made a splash earlier this year when he offered to buy up to 4 billion euro in Greek bonds, more than 10 percent of outstanding Greek debt.
The Wall Street Journal reported in June that “European bond markets were perplexed,” by what was called “an unusual tender offer.”

Reuters wrote that during a recent conference call, Kazarian said that “Japonica was one of the larger, if not the largest holder of Greek government bonds, after excluding Greek public pension funds’ roughly 6 billion euro holdings.”

The full text of the advertisement, which appears on page A7, follows:

“Greece is A+

An open letter and call-to-action for public policymakers in Athens, Brussels, Frankfort, and Washington, DC.

November 2013

Call-to-action: it is an irrefutable fact that Greece has accomplished one of history’s most extraordinary sovereign fiscal rejuvenations, an A+ performance. Now is the time to progress beyond the current economically irrational and anachronistic accounting that obfuscates that Greece merits an A+ credit rating and government bond interest costs below 5%. Now is the time to recognize that this accounting is the single biggest and most easily removed obstacle to extraordinary growth in Greece. And, now is the time for public policy makers to expeditiously advocate accounting as well as presentation that reflects economic reality, improves decision-making, and increases accountability.

Greece has advanced to 1st place from last place in only five years on two of the most important fiscal performance indicators, an accomplishment that most believed was impossible. Greece is now ready to repeat its extraordinary performance with extraordinary growth.
Greece is ranked 1st place among the European Union’s 27 reporting members on the European Commission structural balance as a percent of GDP for 2013 from last place in 2009. To put this in perspective, Greece is moving ahead of world-class Sweden with a 2013 structural surplus of 1.2% of GDP compared to Sweden’s 0.5% of GDP.
Greece is also ranked 1st place among the world’s 30 advanced economies on the International Monetary Fund primary balance (cyclically adjusted) as a percent of GDP for 2014 from last place in 2009. To put this in perspective, Greece is moving ahead of world-class Singapore with a 2014 primary surplus (cyclically adjusted) of 5.4% of GDP compared to Singapore’s 3.3% of GDP.”
Beneath charts reflecting the performance the article refers to, Japonica further noted:

“The importance of the fiscal performance indicators is illustrated by the following comments:

–       “in high-debt advanced economies, consolidation should be anchored in credible medium-term plans, defined in cyclically adjusted terms…” (IMF Fiscal Monitor)

–       “The only number that really matters is the structural deficit.” (International New York Times)

–       “The aim for fiscal policy should be a sustainable cyclically adjusted balance…”

Japonica states that: “We will contribute the resources necessary to change this unacceptable accounting status quo, now.”

The ad concludes by stating:

“Japonica Partners is an entrepreneurial investment firm that makes concentrated investments in underperforming global special situations. Japonica is not a fund, nor does it provide investment advice.”

The last line reads: Disclosure: Japonica Partners owns Greece government bonds.Bloomberg has noted that Japonica is named after the street Kazarian grew up on in the Pawtucket, RI Armenian community and noted “The former Goldman Sachs Group (GS) banker last garnered attention in the late 1980s and early ’90s for deals including an attempted buyout of Borden, a failed $1.6 billion takeover of railroad company CNW, and a three-year stint running Sunbeam-Oster (JAH), an appliance maker he rescued from bankruptcy.”

The Wall Street Journal wrote that “a perusal through The Wall Street Journal’s archive paints a picture of a corporate raider of an old-school mold, and a whiz-kid investor whose smarts came coupled with a temper.”

A telephone call to Japonica has not been returned at press time, but Bloomberg reported that although Kazarian declined a past request for an interview request, a Japonica spokesman said the firm ‘long-term perspective on Greece’ and that the firm wanted to align its investment interests with those of the country.”