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Canada Goose sale Lisbon needs to sort out Banco Espirito canada goose uk shop Santo fast. Despite a recent successful rights canada goose clearance issue, Portugal second largest bank by value has a troubled canada goose factory sale major shareholder and a large exposure to shaky Angolan loans. With Portuguese bond yields up 40 basis points since July 7 and domestic bank shares tanking, a speedy restructuring is needed. Canada Goose sale

Canada Goose online BES market value has almost canada goose coats on sale halved since May, when details emerged of irregularities at its ultimate parent company, Espirito Santo International. This is the bank first big problem. ESI and the chain of intermediate companies canada goose store in the Espirito 2018 Sale Canada Goose Santo group are funded with short term debt, some of which was canada goose sold through the BES retail canada goose uk outlet network. Canada Goose online

cheap Canada Goose ESI and another group company, Canada Goose Jackets Rioforte, appear to be struggling to roll over their debt. Yet another entity, Espirito Santo Financial Group BES immediate parent has been plugging the gap. It told the market on July 3 that its exposure to Rioforte and ESI had nearly doubled in just six months to 2.4 billion euros support the reimbursement of (ESI and Rioforte) commercial paper. That caused Canada Goose Online Moody to downgrade ESFG debt by three notches on July 9. Its senior bonds are trading at just 60 percent of par. cheap Canada Goose

canada goose That leaves BES with a problem: it has lent over 1 billion euros to ESFG and Rioforte combined. With roughly 6 billion euros of core Tier 1 capital, default would hit its 9.8 percent Basel III core Tier 1 ratio just as the European Central Bank is stress canada goose clearance sale testing euro zone banks. A BES group restructuring, as described in Portuguese media on July 9, would help particularly if it can shield ESFG, BES Canada Goose Coats On Sale largest direct exposure. canada goose

Canada Goose Jackets The snag is that the reported terms don sound that great for the holders of commercial cheap canada goose uk paper. They would mean losses of up buy canada goose jacket to 70 percent, according to Breakingviews calculations. A restructuring might create other problems. Holders of group commercial paper might sue BES for selling them the debt. Canada Goose Jackets

canadian goose jacket Then there BES Angola canada goose coats business. canadian goose jacket

canada goose coats on sale The bank operations in the former Canada Goose sale Portuguese colony grew dramatically after Canada Goose online 2005, even during the Portuguese sovereign crisis in 2011 12. It relied canadian goose jacket on its parent for funding: the loan to deposit ratio hit 220 percent by uk canada goose outlet 2013. That rapid growth is now backfiring. Bad loans in Angola soared 84 percent between 2010 and 2013, salecanadagooseoutlets according to KPMG. canada goose coats on sale

canada goose deals The Angolan government has given BES a fuzzy sounding guarantee, but that only cheap Canada Goose covers 70 percent of the 6 billion euro loan book, and expires in mid 2015. If BES Angola were to fail, BES could have canada goose uk black friday to write down the value of its stake or even face losses on $2.7 billion of intra group loans. canada goose deals

Canada Goose Parka The Bank of Portugal, which regulates BES, has started to do Canada Goose Parka the right thing. It forced BES to appoint an outsider when Espirito Santo family patriarch Ricardo Espirito Santo Salgado stepped down as executive chairman last month. It also has 6.5 billion euros remaining in its Bank Solvency Support Facility if BES buy canada goose jacket cheap needs propping up. The problem is understanding how bad the losses really are. Citi reckons BES capital common equity Tier 1 ratio could fall to 3.1 percent in uk canada goose a worst case scenario, but it may never come to that. BES should provide far better disclosure on the potential exposures it has to its parent companies; how much debt is secured; and what it Canada Goose Outlet is secured on. And it should disclose what its potential losses in Angola could be, and how much of the intra group debt is secured. Once BES position is clear, it will be able to raise more capital if needed, or seek support from the government. Canada Goose Parka

canada goose black friday sale Second, the canada goose black friday sale government needs to manage as best it can the fallout from the Espirito Santo group companies, pushing through an orderly restructuring, and making sure it is equitable for creditors. It will be traumatic for lenders, particularly those who thought they owned safe commercial paper. One creditor, Portugal Telecom, has lost a third of its market value in the last month. Yet however painful, the restructuring should be manageable. canada goose black friday sale

canada goose store The Espirito Santo group has managed to create a national crisis out of a family drama. Dawdling could make an already big mess even bigger canada goose store.

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