Paul Kilby – Reuters, 8/17/2012
The move has left much of the buyside up in arms, feeling they are taking the fall for what they see as poor oversight by the central bank. Cruzeiro is the fourth Brazilian mid-tier bank to go bankrupt in recent years.
“Clients think they have to pay for the lack of work that the central bank should have done,” noted one US-based trader.
Law firm Bingham McCutchen is trying to organize a critical mass of investors to contest a tender offer for some US$1.6bn in outstanding dollar bonds. The tender is conditional on participation from local and international creditors holding at least 90% of the principal amount, so Bingham is said to be trying to get 10%-plus on board to gain some leverage against the FGC proposal.