Goldman Sachs stands to lose money on a multi-million euro loan it made to one of Portugal's largest banks a month before it collapsed, the Wall Street Journal reported on Tuesday.
The US investment bank made the $835-million (635-million-euro) loan in July through a Luxembourg financing vehicle it created at a time when Banco Espirito Santo, on the verge of bankruptcy, found it nearly impossible to borrow money directly in capital markets, the newspaper said.
The loan proved to be only a brief lifeline for BES, which was bailed out and dismantled in August. A recapitalisation of nearly 5 billion euros was paid for largely with public money.
The Journal said Goldman Sachs would lose money on the previously undisclosed deal.
Quoting a source familiar with the matter, it said the US bank had planned to sell the debt to outside investors but struggled to find buyers.
Goldman Sachs managed to sell part of the debt at a loss to hedge funds specialising in distressed debt but still holds part of the liability, which has lost value, the newspaper said. It did not specify how much the bank stands to lose.
The so-called special purpose vehicle (SPV) used to make the loan is being probed by Portuguese regulators looking at BES's collapse.
Last month Credit Suisse acknowledged it created SPVs that allegedly allowed the Portuguese bank to keep issuing debt despite its financial woes.
GMT 14:08 2018 Friday ,14 December
Bank of Russia raises key rateGMT 13:23 2018 Thursday ,13 December
Philippine central bank holds overnight borrowing rate steadyGMT 11:33 2018 Tuesday ,11 December
Top EU court backs legality of ECB bond buyingGMT 20:46 2018 Wednesday ,05 December
World Bank funds water projects in North Kordofan StateGMT 15:06 2018 Friday ,30 November
Egypt, World Bank seek cooperation in solid waste recyclingGMT 12:21 2018 Wednesday ,28 November
BisB silver partner of World Islamic Banking ConferenceGMT 09:19 2018 Thursday ,22 November
AIIB Jin Liqun praises Suez Canal projectsGMT 15:05 2018 Friday ,16 November
World Bank Regional Vice President First Visit to West Bank and GazaMaintained and developed by Arabs Today Group SAL.
All rights reserved to Arab Today Media Group 2021 ©
Maintained and developed by Arabs Today Group SAL.
All rights reserved to Arab Today Media Group 2021 ©
Send your comments
Your comment as a visitor