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Press Release of Banco de Portugal on the meeting with the association of customers owning commercial paper of Grupo Espírito Santo

Today Banco de Portugal received representatives of Associação “Os Indignados e Enganados do Papel Comercial” ('Association of Dissatisfied and Misled Investors in Commercial Paper'), following a request from this association. Banco de Portugal held the meeting in order to help provide a complete clarification of the legal situation for investors that acquired debt securities in Grupo Espírito Santo (GES) entities through branches of Banco Espírito Santo, S.A. (BES).

Banco de Portugal duly took note of the issues raised by the association's representatives, providing the following clarifications during the course of the meeting:

1. Repayment of debt securities not issued by BES — even where placed by that entity — is the exclusive responsibility of the respective issuers, as they are the debtors of the claims relating to those securities.

2. Any repayment guarantees assumed by BES in the trading of debt instruments issued by entities forming part of GES, where not a direct consequence of that trading, were transferred to Novo Banco, under the terms of the Banco de Portugal deliberation that enacted the resolution measure, provided that they are unsubordinated claims arising from contractual provisions, prior to 30 June 2014, evidenced through documents stored in BES's archives in terms that allow the control and verification of the decisions taken. To date, no evidence of any claim fulfilling these criteria has come to light.

3. Similarly, the provisions constituted by BES with a view to cover reputational risks arising from the trading of securities representing debt from companies in GES's non-financial arm have not at any point represented recognition of a right invocable by third parties.

4. On the date of the resolution, Novo Banco was in a position to constitute provisions against confirmation that unsubordinated claims over BES existed under the terms described in point 2 of this press release, and against a possible decision by the Board of Directors of Novo Banco to present a commercial solution to its retail customers that had acquired GES debt securities. As neither of these things had happened by the date of publication of Novo Banco's balance sheet on 3 December 2014, no provision was created in that balance sheet for any costs, obligations, duties or commitments arising from retail customers holding GES debt securities. 

5. Given that Novo Banco is not responsible for debt traded by BES and issued by entities forming part of GES, and as established in the Deliberation of the Board of Directors of Banco de Portugal on 14 August, disclosed at the time, Novo Banco is also not prevented from designing commercial solutions for holders of those securities, in the interests of both parties simultaneously, always under the condition that this does not harm the financial equilibrium of Novo Banco.

Lisbon, 13 February 2015