London Hedge Fund Challenges Novo Banco Over ‘Defaulted’ Bonds

Novo Banco is facing a fresh challenge from a London hedge fund that says the bank has unwittingly defaulted on certain bonds, further complicating a crucial debt sale the Portuguese lender is looking to complete this week, the Financial Times reported. Novo Banco, the lender created out of the failure of Portugal’s Banco Espírito Santo (BES) in 2014, is already the subject of long-running litigation from international investors including BlackRock and Pimco, who lost money due to a controversial debt transfer at the end of 2015. London-based Winterbrook Capital sent letters to the board of Novo Banco earlier this month, according to people familiar with the matter, outlining several events of default that the fund believes have been triggered on the bank’s senior bonds. Read more. (Subscription required.)