- Portuguese equities sold off, and the country's bond yields spiked, amid fresh concerns about the financial health of Banco Espirito Santo, whose parent company (Grupo Espirito Santo) happens to be a major Portugal Telecom (NYSE:PT-OLD) shareholder.
- Meanwhile, Brazilian state development bank BNDES has sharply criticized PT's purchase of $1.23B in debt issued by a Grupo Espirito Santo subsidiary, asserting the deal doesn't meet "minimum standards of good corporate governance."
- The bond purchase has already led to board resignations, as well as scrutiny from Brazilian securities and telecom regulators. The backlash has sparked fears PT's planned merger with Oi (OIBR) could be derailed.