(Reuters) Portugal’s state-rescued Novo Banco has launched a debt swap to boost its capital ratio, the last step to concluding its sale to U.S. private equity firm Lone Star.
The bank said in a statement that it aims to raise 500 million euros ($583 million) from the swap and would offer to buy 36 bond issues at “market prices” in a process that would run from Tuesday until Oct. 2.
The operation is a condition of the sale of 75 percent of Novo Banco to Lone Star, which was agreed in March. The government has said it hopes to conclude the sale by November.
Novo Banco was carved out of Portugal’s biggest ever bank collapse in 2014 after a 4.9 billion euro rescue operation of Banco Espirito Santo.
A group of bondholders led by U.S. fund BlackRock have sought an injunction to block the sale of Novo Banco, fearing it would damage their claim to be compensated for an estimated 1.5 billion euros in losses suffered on Novo Banco bonds.