Large international investors tighten financial thumbscrews on Portugal

Following news that a group of large investors who lost millions in the BES debacle is “threatening Portugal” (click here), finance minister Mário Centeno has sought to ally concerns by effectively shooting himself in the foot.

Talking in London yesterday, Centeno said the government and Resolution Fund was “working towards an agreement that could come to €600 million”.

But a source for the group of investors led by asset managers PIMCO and BlackRock is reported as saying that not only are no formal negotiations in place, the €600 million figure is a nonsense.

“This is the amount they (the investors) are legally due”, said the source. “It’s a base”, but in no way a figure that anyone would be satisfied with – particularly as losses of over €2 billion are at issue.

But the fact that Centeno has been caught out (again!) bending the truth (readers may recall, he was accused of lying over the disclosure deal with former CGD directors) is not doing him any favours.

In fact, it will ensure that PIMCO, BlackRock and partners in the group continue to boycott Portuguese investments, says Expresso – stressing that this could cost the country as much as €8.2 billion over the next decade.

As the paper explains, a legal challenge has already been lodged through the courts – but it could take years to settle what has become known as the Novo Banco senior bond dump (click here). Thus, investors hope that by turning up the pressure an acceptable deal can be forged.

Centeno will now be fully aware that €600 million is not about to tick any boxes.

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