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Portugal extends loan maturity to bank fund to 2046
March 21, 2017 / 12:31 PM / 9 months ago

Portugal extends loan maturity to bank fund to 2046

LISBON, March 21 (Reuters) - Portugal’s government on Tuesday extended the maturities on over 4 billion euros of its loans to the country’s bank resolution fund by nearly three decades to 2046, ensuring that banks can keep paying what they currently pay in fund contributions, the finance ministry said.

The decision comes as the state is in the final stages of negotiating a deal to sell rescued bank Novo Banco to U.S. fund Lone Star, which has offered to inject up to 1 billion euros into the bank in return for a 75 percent stake, but with little or no money to be paid to the state itself.

Portugal injected 4.9 billion euros in Novo Banco in 2014 via the bank resolution fund, which is the common responsibility of all banks operating in Portugal, who have to foot the bill for any difference between the rescue funds and the selling price.

Reporting By Andrei Khalip, editing by Axel Bugge

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