NOVO BANCO tackled the legacy of a controversial 2015 debt transfer to secure a €300m three-year non-call two senior preferred debut on Tuesday that was only marginally oversubscribed and ultimately priced in line with initial guidance.The inaugural deal was aimed at starting Novo Banco's build-up of MREL-eligible debt after it received its regulatory targets last month, with a concurrent tender offer and consent solicitation for the bank's legacy senior bonds designed to normalise its capital structure.Novo Banco was set up by the Portuguese authorities to save assets and certain liabilities of Banco Espirito Santo after the latter failed in 2014. In late 2015, the Portuguese central bank then re-transferred five senior bonds held mainly by international funds back to BES,which was being liquidated. A group of bondholders launched litigation efforts after suffering losses, and some, including BlackRock and Pimco, said they would boycott subsequent bond issues from Portugal over their treatment by the Portuguese authorities.
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