LISBON Aug 4 A Portuguese state loan worth 4.4
billion euros to rescue the country's second largest listed bank
carries an incremental interest rate to encourage its repayment
before the maximum maturity of two years, the finance minister
said on Monday.
Maria Luis Albuquerque told SIC television the loan to the
autonomous bank resolution fund, which in its turn recapitalised
the "good bank" split from Banco Espirito Santo, should have no
impact on Portugal's ability to reach its budget deficit goal of
4 percent of national output this year.
The initial interest rate on the loan, which comes from
Portugal's bailout line, would be the average cost of debt under
the rescue - 2.8 percent plus 15 basis points for the first
three months. It is extendable each three months for a total of
up to two years.
"For every three months that the loan is renewed there is an
additional increase of 5 basis points, which is understood as an
incentive for a swifter repayment," she said.
The rescue plan for Banco Espirito Santo, unveiled late on
Sunday, involved splitting it into a "good bank", renamed Novo
Banco, and a "bad bank", which will house BES's exposures to the
troubled business empire of its founding Espirito Santo family
as well as its Angolan subsidiary.
The total size of the recapitalisation of Novo Banco via the
bank resolution fund, set up by the Portuguese authorities in
2012, is 4.9 billion euros. The state agreed to lend the fund
4.4 billion euros. Novo Banco will later be sold off to
investors to reimburse the fund and the state.
Before that sale, banks that contribute to the resolution
fund may instead choose to repay the state and provide their own
loans to the fund, Albuquerque said.
The rate is below that applied on state loans to banks
extended in 2012 at the height of the country's debt crisis
because those were convertible into banks' shares and the state
had to assume the risk.
"In this case there is no risk. We just need to guarantee
that taxpayers are not harmed, that the money is paid back soon,
so if it takes longer there is a penalty charge."
Portugal emerged from a 78 billion euros, three-year bailout
financed by the European Union (EU) and the International
Monetary Fund (IMF) in May, but it had 6.4 billion euros left
over from a bailout line earmarked to aid the country's banks.
(Reporting By Andrei Khalip; Editing by Gareth Jones)