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Bondholders file injunction to block Novo Banco sale over bond transfers
April 11, 2017 / 11:17 AM / 6 months ago

Bondholders file injunction to block Novo Banco sale over bond transfers

LISBON, April 11 (Reuters) - Bondholders led by U.S. funds Pimco and Blackrock have filed an injunction to block the sale of Portugal’s Novo Banco over a decision by the country’s central bank to transfer 2.2 billion euros in 2015 to a ‘bad bank’, the group said on Tuesday.

The transfer in 2015 of the bonds from Novo Banco to the ‘bad bank’ of Banco Espirito Santo, which collapsed in 2014, led to losses for bondholders of 1.5 billion euros, the group said in a statement.

“Several of the institutions, including Blackrock, have been large and long-term financial partners of the Portuguese government, financial institutions and corporates,” the statement said.

The statement added that “in the face of such discriminatory and prejudicial action,” the group had no choice but to launch the action against the Bank of Portugal.

A spokesman for the group said they filed an injunction to a Lisbon court on Sunday against the sale of Novo Banco, which was agreed at the end of March.

Reporting By Sergio Goncalves and Axel Bugge

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