Hedge Funds Bet on Cyprus Avoiding Default

Hedge funds are betting that Cyprus won’t default despite the country’s current bailout troubles. The next round of bonds that Cyprus is due to pay, on June 3, are trading at 83 percent of their face value. The high valuation, for a country that seems at risk of default, means that those trading the bonds overwhelmingly think that the country will not default. According to a Reuters article, the €1.4 billion issuance, which is due to be paid in early June, has a 3.75 percent interest rate attached to it. On Tuesday Cyprus parliament voted to reject a €10 billion…