Bank CGD in roadshow to attract investors

One of Portugal’s largest banks, state-owned Caixa Geral Do Depósitos has issued bonds worth €500 million aimed at attracting international investors.

After presenting the Tier 2 capital issue it was in Paris on Tuesday and London on Wednesday and so far has attracted “scores of investors”.

The funds raised from the bank bonds will be used to recapitalise CGD, according to Bloomberg, which reported that the bank has appointed BNP Paribas, Bank of America, Merrill Lynch, CaixaBI, Credit Agricole, Credit Suisse and Unicredit to hold the meetings with investors.

A CGD spokesperson said the bond issues would be solely aimed at professional investors and not retail customers and is subordinated to Tier 2 debt with a 10-year maturity with an option call from CGD within five years.

He said that with this issuance the final steps of CGD’s Recapitalisation Plan was fulfilled.

This second issuance should have a lower cost, after CGD achieved authorisation from Brussels to issue AT2 debt – unlike the situation with the first issue, when AT1 debt was issued with interest rates of 10.75%.

The agreement negotiated with Brussels also includes a staff redundancy package from branch closures.

The bank led by Paulo Macedo will press ahead with 70 branch closures this year after shutting 64.   Some 347 staff have left the company in five months while three banking groups are said to be interested in buying the bank’s interests in Spain and South Africa (Mercantile Bank Holdings).