(BN) Espirito Santo Issues 3-Year Debt Guaranteed by Portuguese State

Posted by on Jan 6, 2012 in Uncategorized | No Comments

I haven’t found the bond details yet, but guess there is no rush when you issue it to yourself and send it straight to the ECB.  I can’t imagine there was massive actual demand for this.  Portugal itself cannot issue bonds to the market.  Its 2 year debt yields more than 13%.  So why exactly is the ECB so happy to get the bonds with a Portuguese government guarantee?

The bank has a 1.7 billion Euro market cap with a Ba2/BB rating – both with negative outlooks.

If the Japanese created the “zombie” banks the Europeans are perfecting them.

This may not be a reason to be short but it certainly offends one’s sensibilities.  It also seems to guarantee that the Portuguese sovereign debt situation is worse than we know (lots of contingent liabilities) and all the banks and sovereigns are becoming increasingly tied together.

On the bright side, the ECB has saved itself the effort of creating a “bad bank” and has just become one.


BFW 01/06 16:59 Banco Espirito Santo Issues EU1b in 3-Yr State-Guaranteed Debt

Espirito Santo Issues 3-Year Debt Guaranteed by Portuguese State

2012-01-06 16:59:07.735 GMT

By Joao Lima
     Jan. 6 (Bloomberg) — Banco Espirito Santo SA, Portugal’s
biggest bank by market value, said it issued 1 billion euros of
three-year debt guaranteed by the Portuguese state, according to
a regulatory filing.


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