Novo Banco, S.A. Tender and Exchange Offers and Inaugural Tier 2 Notes Offering

Davis Polk advised the dealer managers in connection with a liability management exercise by Novo Banco, S.A. with respect to 20 series of its outstanding senior debt securities, offering either new Tier 2 fixed rate reset callable subordinated notes due 2028 (the “Tier 2 notes”) or cash consideration. The aggregate amount of target securities tendered in the tender and exchange offers was approximately €1 billion. Davis Polk also advised the same banks as joint lead managers on a concurrent offering by Novo Banco, S.A. of additional Tier 2 notes. The aggregate nominal amount of the new Tier 2 notes issued in the offering and pursuant to the exchange offer was €400 million.

Novo Banco is a Portuguese financial group created in August 2014 following the application by the Bank of Portugal of a resolution measure under the Portuguese Banking Act to Banco Espírito Santo. Novo Banco’s issuance of Tier 2 notes marks its return to the primary capital markets for the first time since the application of the resolution measure.

The Davis Polk team included partners Reuven B. Young and Simon Witty, counsel Radoslaw Michalak, European counsel John Taylor and associate James Harmer. Partner Jonathan Cooklin and associate Dominic Foulkes provided tax advice. All members of the Davis Polk team are based in the London office.