Bill Gross: Euro Debt Downgrades May Force Selling
January 17 — Pacific Investment Management Co.’s Bill Gross said credit-rating cuts of euro-area debt may trigger some forced selling by investors who are require to hold only the highest quality securities in their portfolios.
“There are those that say the downgrades don’t matter,” Gross, manager of the world’s biggest bond fund, said in a radio interview on “Bloomberg Surveillance” with Tom Keene and Ken Prewitt. “In fact they don’t for the most part. But there are regulatory issues in the case of structures that are dependent on certain types of ratings and to the extent that various countries get downgraded, then those positions have to be reduced if only because of regulation.” Read more.
