Caixa Geral Recapitalization Depends on Costly Junior Debt Sale

Caixa Geral de Depositos SA’s access to much-needed state funds hinges on its ability to sell the riskiest type of bank debt.

Portugal’s biggest lender must sell 500 million euros ($561 million) of additional Tier 1 bonds “simultaneously” to a capital injection as one of its commitments, according to a Finance Ministry spokeswoman. The state-owned lender has to sell another 500 million euros within 18 months of the recapitalization to meet European state-aid rules, she said.