Interessante riassunto... confidiamo che non sia proprio l'ultima possibilità di fuga
NOVO BANCO OFFERS EXIT ROUTE TO SENIOR BONDHOLDERS
23-Jun-2016 16:32
- Sub par senior buyback to bolster balance sheet
- Retail investors targeted in offer
- Bondholders offered way out in uncertain future
By Alice Gledhill
LONDON, June 23 (IFR) - Novo Banco wants to buy back eightsenior bonds at a deep discount to par to bolster its balancesheet and reduce interest expense.
Novo Banco, carved out of the collapse of Banco EspiritoSanto in 2014, is seeking to buy back up to €500m of seniordebt, some of which is held by retail investors.
The tender is part of the bank's business plan, developedafter submitting a restructuring plan to the European Commissionat the end of 2015.
The Portuguese lender is trying to restore profitability andreduce exposure to non-core assets. The tender should improveits capital position and future interest payments, the banksaid.
The announcement brings Novo Banco back in the spotlightafter the unexpected transfer of some of its senior bonds backto its predecessor entity, in December 2015, imposingsignificant losses on bondholders and sending shockwaves throughbank debt markets.
Discounted senior debt buybacks in sound banks are unusualbut it makes sense to take advantage of depressed secondaryprices, said a banker away from the trade.
Novo Banco bonds have taken a beating this year overconcerns on the health of the Portuguese economy, its status asa bridge bank and its sale process.
The Portuguese government has so far failed to sell the bank(rated Caa1 by Moody's), which had an original sale deadline ofAugust 2016.
Prices fell to the mid-to-high 60s, according toCreditSights data. The bonds traded up to 3-4 points onThursday.
WAY OUT
A lead said the 'very fair' offer gives investors an exit -though they can chose to hold onto the bonds - and has beendeveloped with the Bank of Portugal and the ECB.
The tender is targeting eight euro and dollar bonds throughan unmodified Dutch auction that sets a minimum purchase price,giving retail investors in particular a vital steer as to thelevel where they can get taken out.
The minimum levels reflect a premium of about 1.5% to 2.5%above the market prices of the notes on June 22. The issuer hassole discretion on which bonds it buys back, of which€2.4bn-equivalent is outstanding.
'Any issue of liquidity, particularly on illiquid bonds likethese, is welcome to investors and they're able to reduce theirpositions at a premium over secondary levels,' added the bankeroff the trade.
Market sources pointed out that the tender coincides withthe European Central Bank's new round of TLTROs whicheffectively offer banks free four-year loans.
'They can borrow €500m for free from the ECB and buy backbonds at a 20 point discount creating €100m of equity andimprove their net interest margin,' said one investor.
'This at least superficially makes them more attractive to apotential buyer and also illustrates to the market that theyhave the liquidity to carry out this transaction.'
DISTRESS SIGNAL?
For others however the tender comes as a warning sign.
'From the tender announcement it is clear that this is abank in distress and these are quite desperate moves,' said MarkHolman, chief executive officer at TwentyFour Asset Management.
'It once again throws into question the strategy of the movein December when they took the five bonds out of Novo and putthem back into the bad bank. Why not just include them in thistender? To me it reads as though the bank is finding itself inincrementally worse shape as the year has gone on.'
While the Bank of Portugal said the transfer of assets inlate 2015 was 'final and definitive', Novo Banco remindedinvestors in the tender's documentation that they could still bebailed in.
'The wording is poignant and worrying. We're saying that youshould tender your bonds into this; it's an opportunity to getout when there is so much uncertainty,' said John Raymond, asenior banks analyst at CreditSights.
UNCERTAIN
Future prospects for Novo Banco, which is stuck in a lowgrowth environment, are unclear.
'The question is whether it's actually worth anything. Theloan forbearance problem is huge and you have to find investorsthat are prepared to take that on. Portugal is not a scenario Iam particularly optimistic on and there are easier problems tosolve in Europe,' said one banker.
Portugal reported an NPL ratio of 13.58% in June 2015, amongthe highest in Europe and akin to Italy's 16.08%, according toECB data.
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.alcuni di loro sono stati emessi a 50,60 mi pare di,ricordare
