Major funds boycott BCP’s debt issuance

  • ECO News
  • 29 November 2017

Large funds will boycott the Portuguese bank BCP's debt issuance, as they had previously done with CGD. These investors, among which stands Pimco and BlackRock, complain of the money they lost on BES.

BCP is on the market. The Portuguese bank aims to issue 300 million euros in debt securities to reinforce their capital ratios, in an operation that will not include some of the largest international investment funds, such as Pimco and BlackRock. The reason for this decision goes back to the money these investors lost in bonds that went from Novo Banco to BES.

“We will not be participating in this issuance” BCP is performing, is stated in a joint press release from Attestor Capital, BlackRock, CQS, PIMCO, River Birch Capital and York Capital. The bank headed by Nuno Amado aims to issue 300 million euros in ten-year bonds, which can be reimbursed after five years. When contacted by ECO, BCP refrained from commenting.

“We have each decided that the risks associated with actively investing in Portuguese public or private debt are prohibitive, as the Banco de Portugal still has not addressed the unlawful and discriminatory retransfer of notes from Novo Banco to Banco Espírito Santo in 2015“, the funds state. The decision regards the transfer of five series of bonds assessed at 2.2 billion euros from Novo Banco to the “bad” BES.

These funds, which had already boycotted CGD’s debt issuance, state they “look forward to resuming our discussions with the Portuguese authorities in order to resolve the situation quickly and re-establish Portugal as a credible destination for foreign investment.”