The early repayment of the debt contracted with Santander Totta allowed Oitante to save €110 million in interest.
Oitante has paid back the full €746 million loan it borrowed from Santander Totta as a result of Banif’s resolution in December 2015, the company reports this Monday.
“The final repayment was made on June 30 for €18 million, bringing forward by three and a half years the maturity of the bond loan initially scheduled for December 2025,” said the company created seven years ago to manage Banif’s toxic assets that were not acquired by Santander.
According to Oitante, the early payment of the bond loan allowed for savings of more than €110 million between 2016 and 2022. In total, it paid over €62 million in interest.
“It is with immense pride and sense of achievement that Oitante meets one of its major objectives, the full repayment of its debt,” stresses the entity led by Miguel Artiaga Barbosa. The debt’s repayment “allowed both the Resolution Fund and the Portuguese State (taxpayer) to be released from the guarantees and counter-guarantees initially provided,” it explains in a statement.
‘Essential’ to avoid Banif’s disorderly closure
The Bank of Portugal congratulated Oitante for the full settlement of this loan, noting that “it gives prospects to recover a significant part of the €489 million disbursed by the Resolution Fund, in 2015, to finance Banif’s resolution”.
Oitante was the company set up by the Bank of Portugal (BoP) as part of Banif’s resolution, on December 20, to manage the assets that were not part of the deal to sell to Santander Totta for €150 million.
To go ahead with this transfer of assets, Oitante had to issue debt that was underwritten by Santander Totta. This loan was “indispensable for the resolution to take place and thus avoid the disorderly liquidation” of Banif, the regulator recalled.