Consortium offering €15 billion for Portugal’s bank debt “just one of four”

After what was billed as an impressive offer, headed up by a Portuguese investment banker, it now appears that four separate entities are bidding for Portugal’s non-performing bank loans.

Público gives the ‘wider picture’ today, adding that the consortium led by António Esteves is US private equity group TPG (click here).

But what is interesting is that TPG is not alone: two other “anglo Saxon funds” (one of which is identified as Blackrock) are pitching for the €30 billion landscape of bad debt.

Stormharbour, too, is another name stacking up on the horizon – led by “three bankers”, one of which is Portuguese.

Intriguingly, Público explains that Stormharbour is the ‘assessor’ for north American group Apollo, currently bidding for Novo Banco.

In other words, the ‘race’ for Portugal’s bad bank debt appears pretty incestuous. It also appears to have arisen from declarations made by prime minister António Costa last April when he said the government was looking for a “vehicle” in which to park the country’s €30 billion or so of toxic bank loans in order to “liberate the system”.

According to Píblico, roughly half the value of the loans has been ‘covered’ by budgetary provisions, thus the need to find a source to ‘buy up’ the other half.

Whichever deal is signed, and with whom, the paper says it would have to involve a “mechanism that compensates the discrepancy (hole) between the value of the non-performing loan as registered by the bank’s accounts, and its real market value. This is because non-performing loans are given higher values, generally, than would be gained through divestment”.

It is this final sentence that explains why so many sources might suddenly be so interested in billions of toxic liabilities.

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