Adding to the furore over government plans to “sell” Novo Banco to US “vulture fund” Lone Star, ratings agency Moody’s has slashed the bank’s already abysmal ratings to the eighth level of “rubbish”.
Negocios online explains Moody’s was prompted by the ‘€500 million voluntary bond swap’ aspect of the deal, which it says will provoke losses for senior bond investors concerned.
Reducing Novo Banco’s ‘senior bond rating’ to Caa2, Moody’s has also cut the rating that measures the bank’s “intrinsic solidity”, says the site, while ‘deposit’ ratings have fared slightly better, staying at Caa1 but remaining under what is called in financial circles “negative vigilance”.
This is just the latest broadside to batter the ‘deal’ laid before the country as everyone clocked off for the weekend, last Friday.
Other than establishment noises that the sale is “the least bad option” available, fewer and fewer quarters appear to be able to swallow it.
A heated debate in parliament yesterday saw Bloco de Esquerda’s Mariana Mortágua explaining more of the flawed mathematics involved.
“In the worst case scenario, Lone Star will pay a billion euros to end up with a good bank, and the State will pay €7.79 million to end up with no bank at all”, she said.
The €7.79 million includes the €3.9 that the State’s Resolution Fund initially injected into the bank, and the rest is a figure for the “public guarantees” that the “government assured would never exist”, she explained.
Almost a week since the sale agreement was announced, the country still has no idea whether it will in fact move forwards (click here).
By natasha.donn@algarveresident.com
Article by kind permission of Portugal Resident
Comments
Unlike much of the rest of the EU. Where a political, policing and judicial system perpetuates privileges to a higher class over the ordinary citizens so cannot be a healthy, functioning societies. Hence the growth in populism.
How else to explain the Portuguese Presidents recent statement that, following numerous crashed Portuguese banks, it may take 30 years of the Portuguese 'tax payer' paying back everyone that is owed - but "so what (am I bothered) " ? Not exactly inspirational to young Portuguese wanting the certainty that at last the Portuguese elite, who took and still have this money, would be hammered for it first.
Even if not directly involved (or their friends and family) all will be familiar with the wheelers and dealers that swim around them. The fixers who make things happen .... or not. The Greeks have a word for these intermediaries - 'foxes'.
http://www.ekathimerini.com/217424/opinion/ekathimerini/comment/the-foxes-are-still-in-control