Goldman Sachs and several of its clients stand to lose hundred of millions of dollars from a loan made to Banco Espírito Santo just weeks before the lender collapsed in August, after the Bank of Portugal said the claim won’t be honoured by Novo Banco, the 'good bank' carved out of BES.
MarketWatch reports that Novo Banco said it was told by the Bank of Portugal last week that it wouldn’t have to repay $835m owed to financing vehicle Oak Finance Luxembourg, in a reversal of an earlier decision by the central bank.
The loan will instead remain an obligation of the 'bad bank' that kept the Banco Espírito Santo name and its worst assets.
Goldman Sachs, which set up Oak Finance and bought notes issued by the vehicle against the loan, said it plans on 'pursuing all appropriate remedies'.
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