Carlos Costa, the governor of the Bank of Portugal, stated the details of the debt exchange - needed to conclude the sale of Novo Banco - will soon be presented.
Carlos Costa, the governor of the Bank of Portugal, stated the details of the debt exchange required to conclude the sale of Novo Banco will “soon” be presented. ECO had already disclosed that the bond exchange proposal would be explained to the market in July. The liability management exercise (LME), aiming to get the transition bank 500 million euros in capital ratios, is an essential condition to conclude the sale to the North-American fund Lone Star.
During the Finance and Budget commission, Carlos Costa was careful when answering about NB’s sale. “The debt exchange is an issue that only concerns Novo Banco; as it is known, it is an unprecedented condition” for the sale to be concluded. The governor only disclosed that “the debt exchange announcement will soon be made”, adding that “Everyone wants the operation to be a success”.
Novo Banco’s sale to Lone Star was announced by the Government in March 31, but the terms of the operation are still unknown. Those terms need to be formally announced by António Ramalho, Novo Banco’s CEO. If the operation is successful, the final date for the sale will happen, as the State secretary Mourinho Félix announced: November. This deadline was now confirmed by Carlos Costa to the deputies.