16 Jul 2014
Espirito Santo bonds recover ground on comments from central bank
FXStreet (London) - Espirito Santo bonds have recovered some ground after reassurances from Portugal’s central bank.
Comments from Bank of Portugal Governor Carlos Costa that shareholders of Espirito Santo were prepared to inject some capital into the troubled bank helped to ease concerns over the need for a bail-in.
Concerns over the health of Espirito Santo debt increased yesterday when a second affiliate, Rioforte Investments, failed to make an EUR897m payment on short-term debt to Portugal Telecom. The missed payment has put a cloud over the planned merger between Portugal Telecom and Brazil’s Oi. It has been reported that officials from both parties met yesterday to discuss the merger and the debt issue.
Portuguese 10-year government bonds have eased 7 points to 3.73 percent on the view that the issues surrounding Esperito Santo were isolated and not a systemic problem within the Portuguese banking system.
Comments from Bank of Portugal Governor Carlos Costa that shareholders of Espirito Santo were prepared to inject some capital into the troubled bank helped to ease concerns over the need for a bail-in.
Concerns over the health of Espirito Santo debt increased yesterday when a second affiliate, Rioforte Investments, failed to make an EUR897m payment on short-term debt to Portugal Telecom. The missed payment has put a cloud over the planned merger between Portugal Telecom and Brazil’s Oi. It has been reported that officials from both parties met yesterday to discuss the merger and the debt issue.
Portuguese 10-year government bonds have eased 7 points to 3.73 percent on the view that the issues surrounding Esperito Santo were isolated and not a systemic problem within the Portuguese banking system.