Investors in €2bn of senior bonds of novo banco transferred back to failed Portuguese lender banco espirito santo in December will still challenge the Bank of Portugal's decision despite the ISDA panel ruling that the government had not intervened and so credit default swaps would not pay out. (See story above.) "You can view this from a CDS perspective or a more fundamental one," said Jochen Felsenheimer, managing director at XAIA Investment, which has a position in the affected bonds. "We have never seen anything like this Novo Banco action before. It challenges the whole community of bank bond investors."
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