Asset managers sue Portuguese central bank over bond losses

Bondholders liable for Novo Banco's troubles

Fourteen fund management groups, including TwentyFour Asset Management and BlackRock, are suing the Portuguese central bank over losses incurred from Novo Banco.

According to the Financial Times, the 14 fund management groups have hired legal firm Clifford Chance to represent them, as they believe the central bank violated key principles and are demanding their holdings are restored. Novo Banco was created in 2014 after the failed Banco Espírito Santo was split into two parts and the toxic assets moved to a "bad bank". At the end of December, five senior bonds, sold as investments of almost €2bn in Novo Banco, were transferred to the "bad bank" in a move approved by the Bank of Portugal, in effect wiping out their value. Causer: 'Bank debt ...