NETHERLANDS - The €57bn pensions investor Syntrus Achmea has further reduced its allocation to Spanish debt to 4.4% of its government bonds portfolio following recent market developments.

Rik Bekkers, fixed income manager at the Dutch pensions provider, said: "The second refinancing of banks by the ECB appears to have had considerably less impact than the first one, and the interest on Spanish 10-year bonds has risen to 5.84%, which is 400 basis points over the rate on similar German government paper.

"Because it announced additional cuts of €10bn merely 10 days after the presentation of its budget, the Spanish government gave the impression it is not in control of its finances."

Two years ago, Syntrus Achmea's allocation to Spanish government bonds was 8% of its government bonds portfolio, which contains 65% of the company's €12.3bn fixed income portfolio, according to Bekkers.

"Meanwhile," he said, "we have divested approximately three-quarters of the Spanish government bonds with a longer duration, reducing the exposure to fall within the risk margins agreed with our clients.

"Currently, we are considering the future of the remaining Spanish long-term bonds, as well as possible alternatives for re-investment."

The assets that had become available following the sale of Spanish bonds have been re-invested in the government paper of Germany and the Netherlands, as well as France, Bekkers said.

Outside the euro-zone, the asset manager has also invested in Norwegian and Danish bonds, but "they are relatively small bond markets, with small government debt", Bekkers pointed out.

Although the asset manager is also allowed to invest in the government paper of Australia and New Zealand, actual investments have not yet been made there.

Bekkers added that he was also considering the possibility of investing in the debt of fast-growing countries with strong economies, such as Brazil, South Korea and South Africa.

The €120bn asset manager PGGM said it had already divested all its holdings in Spanish government bonds some time ago, "as the government's behaviour in the market made it impossible to justify Spanish bonds as a risk-free and liquid investment".

PGGM is asset manager for the €115bn healthcare scheme PFZW and five other Dutch pension funds.

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