Portugal

Look past the investor disputes, the non-performing assets and the triple-C rating. A risky form of debt in one of Europe’s most troubled banks might just be a screaming buy opportunity.

Novo Banco announced the successful pricing of its first public bond issue on Friday afternoon, with the vast majority of investors coming from outside of Portugal despite protests from international investors.

Novo Banco looked set to be able to place a tier two bond after announcing exchange offers from senior bondholders on Friday. But the Portuguese lender is beleaguered by investor protests as it seeks to complete a crucial stage on its path to becoming a normal bank. Jasper Cox reports.

UK asset manager Winterbrook Capital has gone public with a claim that events of default have occurred on Novo Banco senior notes, on the week in which the bank is attempting to sell a tier two bond and tender old senior bonds.

Novo Banco is looking to issue a tier two bond, as it part of an agreement reached when it was acquired by US private equity firm Lone Star last year. But under that agreement the Portuguese Resolution Fund is obliged to step in if the bank cannot place €400m of notes privately.

Sovereign debt officials praised the role primary dealers played during the volatility that hit eurozone government debt markets in the second quarter, though some still feel the system is “not ideal”.

Caixa Geral de Depósitos brought a well-flagged capital trade on Thursday, offering investors a premium to complete a requirement of its recapitalisation plan. But some investors did not participate, citing disgruntlement with how the Bank of Portugal handled Novo Banco's bonds.

Bayer’s €5bn four-tranche corporate bond offering on Tuesday not only cleared the way for other issuers to approach the market, but the €22.5bn of demand gave four issuers the confidence to sell a variety of deals in Europe on Wednesday. €3.5bn was issued in the euro market and £1bn in sterling.

Portugal’s Caixa Geral de Depósitos is lining up a tier two transaction, as bankers look forward to the reopening of primary markets in Europe.

A supranational dollar deal ran away with April’s top spot in BondMarker, outstripping the rest of the table by a good margin and clocking in as the third most highly rated deal of the year.

Rating: Ba1/BBB-/BBB

A pair of sovereigns entered the euro market this week, both returning to the long end of the curve for the first time in three years and drawing large books.