Greek bank boldholders fear Portuguese-style ‘bad bank’ split


National Bank of Greece bondholders are nervous that they will suffer heavy losses if authorities decide to siphon off all of the bank’s healthy assets leaving a “bad bank” to deal with their claims, a source close to a creditor group said.

A group of senior bondholders in NBG sent a letter to European institutions last week saying they were concerned about measures that may be taken to revitalize the Greek banking sector after months of economic upheaval.

The investors, who hold a significant portion of a 750 million-euro NBG senior bond issued last year, are worried the bank may be split into a good bank and a bad bank as was the case for Portugal’s Banco Espirito Santo last year.