Bloomberg News

BlackRock Buys Italian Debt With Bailout Talks Showing Progress

October 21, 2011

Oct. 21 (Bloomberg) -- BlackRock Inc. Chief Investment Officer Rick Rieder said the world’s biggest money manager remains a buyer of Italian government debt as European policy makers gather to address the region’s sovereign debt crisis.

“Italy is attractive,” Rieder said during an interview on “InBusiness With Margaret Brennan” on Bloomberg Television. “As long as we are moving toward solutions, we think Italy is very reasonable at these levels.”

Euro finance ministers meet today, followed by ministers from all 27 European Union countries tomorrow. EU and euro-area leaders gather on Oct. 23, with another euro summit scheduled on Oct. 26. The agenda will focus on how to save Greece from default, shield banks from the fallout and build more powerful defenses against the debt crisis rocking the 17-nation euro economy. As a first step, they are set to approve releasing the next aid payment for Greece.

All 16 countries that were using the euro last year increased their debt load, boosting the region’s average to 85.4 percent of gross domestic product from 79.8 percent in 2009, the European Union’s statistics office in Luxembourg said today. The countries with the highest ratios of government debt to GDP were Greece at 144.9 percent, and Italy at 118.4 percent. Estonia joined the union this year.

BlackRock, which manages about $3.66 trillion in assets, has also been buying debt issued by financial firms and high- yield bonds, Rieder said. As with the Italian bonds BlackRock has bought, the financial debt will benefit “as soon as you see stability,” Rieder said.

High-yield securities have become attractive as a decline in support for the debt by bond dealers has made it harder to trade, Rieder said. That creates “great opportunities” for “investors with a longer-term outlook,” he said.

The European Central Bank bought small amounts of Spanish and Italian government debt today, according to two people with direct knowledge of the transactions, who asked not to be identified because the deals are confidential. Italy’s 10-year rate dropped 12 basis points to 5.89 percent.

--Editors: Dave Liedtka, Dennis Fitzgerald

To contact the reporter on this story: Daniel Kruger in New York at

To contact the editor responsible for this story: Dave Liedtka at

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