Filipe Alves and Antonio Costa
Stock da Cunha will propose solutions for retail customers who invested in bonds unsubordinated BES, forward repurchase by the bank. Solution provides conversion into term deposits to three and ten years.
The New Bank, the Bank of Portugal (BoP) and the CMVM has found a solution to the unsubordinated obligations of the former long-term BES , which were placed along with retail customers, forward repurchase by bancoal, a scheme that helped finance the companies of Grupo Espirito Santo (GES). The solution, which is the first major act of running Stock Eduardo da Cunha, passes through the conversion of these bonds into two time deposits with maturities of three and ten years, both mobilized after 12 months, found the Economic.
As the Economic reported on September 11, several customers of the New Bank complained they can not get the early repayment of investments in senior debt BES , in which the bank had commitments of repurchasing in the near term. In the announcement of half-yearly results, BES admitted that these obligations are securities “very long-term liquidity and expectations that may lead the group to proceed to the purchase of part were created [these emissions] customers. “
This financing scheme using the GES to customer applications BES was detected by auditor KPMG in the second half of July, having forced the creation of provisions amounting to EUR 1.3 billion. This provision which contributed decisively to the historical loss of € 3.6 billion that BES presented in the first half and that triggered the intervention of the authorities, with the measure of resolution announced August 3.
According to sources close to the process, the New Bank will offer customers wishing to redeem, prior to maturity, the amounts invested, a solution that passes, first, by the sale of bonds the market. Then, if the sale proceeds are less than the amount of capital invested by clients, be them will be a proposal comprises two deposits. The first deposit, corresponding to the proceeds of the sale of the bond, will have a term of 36 months and will not be mobilized early in the first 12 months.
This deposit will have an average interest rate of 2.71%. The second term deposits have a maturity of 10 years and will not be mobilized early in the first 12 months. This second deposit will have an interest rate of 4.25%. At the end of 12 months deposits will be mobilized, losing interest; however, be expected that the Bank of New attractive interest rates – as well as renewed capital guarantee – make that many customers keep deposit for longer, not leading to a massive and abrupt outflow of resources. These deposits, like all others, are protected by the Deposit Guarantee Fund.
Payment of obligations was provided by BES
For the New Bank, if successful, this solution will solve one of several imbroglios caused by the collapse of BES . The measure, which includes the consensus of the Bank of Portugal and CMVM should not jeopardize capital ratios and liquidity position of the institution.
On August 14, after the resolution of BES and the creation of the New Bank, bop said in a statement that “the non-subordinated bonds that have been issued by BES will be reimbursed by New Bank on the date of maturity, since the claims by customers relating to these obligations were transferred to the New Bank “. However, the supervisor cautioned how can take place at any repurchase these securities, where investors ask for early repayment, or the New Bank choose to launch a tender offer to repurchase these securities and shall not jeopardize the ratios and the liquidity of the institution. Until the closure of the issue, it was not possible to obtain clarification of official sources Novo Banco, bop and CMVM.
News corrected at 12.50 to clarify that deals with debt issues placed along retail customer BES , with prospects for repurchase by the bank under the scheme detected by auditors in July, which would fund the companies of GES.
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