Shares in Banco Espirito Santo, one of Portugal’s two biggest publicly traded banks, fell 17 per cent yesterday after Bank of America downgraded the lender’s bonds. The shares have lost nearly half their value in a few weeks.
Banco Espirito Santo, advised by Morgan Stanley and UBS, raised €1.04bn (£832m) in May to strengthen capital ratios ahead of the European Central Bank’s stress tests.
Espirito Santo Financial Group said May 29 that Banco Espirito Santo retail clients held 1.5 billion euros of Espirito Santo International SA debt instruments at the end of 2013. On May 19, BES non-institutional investors held 395 million euros of the holding’s debt instruments.
Portugal Telecom SGPS SA, in which Grupo Espirito Santo owns a 10 percent stake, bought 897 million euros of commercial paper from Rioforte, which is fully owned by Espirito Santo International, according to a regulatory filing today. The commercial paper matures in July. Portugal Telecom fell 2.2 percent to trade at 2.667 euros at 2:42 p.m. in Lisbon.