LISBON, March 19 (Reuters) - Portugal’s Banco BPI said on Wednesday it has repaid 500 million euros ($695.48 million) in contingent covertible subordinated bonds (CoCos) to the government and that it intends to repay the remaining 420 million euros by the end of this year.
Portugal’s banks issued CoCos as a way to raise capital during the country’s debt crisis and the financing was provided by the government as one part of Lisbon’s 78-billion-euro bailout by the European Union and International Monetary Fund.
BPI said in a statement that it intends to conclude the repayment of the remaining 420 million euros of CoCos by the end of 2014.
The interest charged on the convertible bonds is high and as such banks have been eager to repay them as soon as possible. They have been able to do this thanks to the bailed out country’s improving economic prospects.
BPI originally received 1.5 billion euros in CoCo financing from the government in June 2012.
$1 = 0.7189 Euros Reporting By Axel Bugge. Editing by Jane Merriman