The senior long-term unsecured debt of Novo Banco, BES's new owner, has ensured Moody's rated the new bank at 'B3,' the sixth level in the Junk category
In a statement issued today, Moody's also said that the rating of Novo Banco deposits is at 'B2', the fifth level of 'junk.'
Meanwhile, the Bank of Portugal is making long overdue progress in identifying insider trading in BES stock and other shares.
The market regulator (CMVM) has identified at least five cases where inside information has been used in share trading involving management at Espirito Santo Group.
Four cases already have been reported and were related to insider trading involving EDP and REN stock and for which Ricardo Salgado has been implicated but not prosecuted, yet. The fifth case is an alleged breach of trust and loyalty involving shares in BES Vida.
Tranquilidade, the insurance company owned by Espírito Santo Financial Group (ESFG) was allocated to the 'good bank' Nova Vida as it was being used as collateral for a loan.
The insurer is owned by ESFG which sought protection from creditors in the Luxembourg commercial court so Tranquilidade should be unavailable to Banco Novo, yet the Bank of Portugal transferred the company to Banco Nova to boost its 'good bank' vibe and balance sheet.
While suspicions grow that the Bank of Portugal does not have a firm grip on the BERS collapse, news was released today that Bank of Portugal injected the insane figure of €3.5 billion into BES before deciding on the last minute deal to divide the bank into good and bad, yet the central bank and Finance Minister continue to claim there is no risk to taxpayers.
Even as the Bank of Portugal was being urged to find a solution to the BES implosion, it already had made the multi billion transfer from the Emergency Liquidity Assistance fund, leaving taxpayers with the liability.
The Bank of Portugal's chief, Carlos Costa, has not been keen to release this information as he does not yet have good grounds for his actions which will have been approved by the Ministry of Finance.
Many hope that Costa's next post better will match his abilities and that Novo Banco is a roaring success as its failure would cost the taxpayers upwards of €10 billion, and counting...
