Investors who bought SNS Reaal NV (SR) bonds in the three days before the Dutch government took control of the lender can’t cancel the trades and are now creditors of the state, a government official said.
Dutch Finance Minister Jeroen Dijsselbloem nationalized SNS at 8:30 a.m. on Feb. 1, seizing its stock and subordinated bonds, after losses on real estate loans brought the firm to the brink of collapse. Trades done after the morning of Jan. 29 hadn’t settled by the time of the takeover, and those buyers are left with a claim on any redress, said the official, who declined to be identified because the transactions are private.
Buyers of the SNS subordinated bonds that the government seized are now the owners of a security identification number that gives them the right to compensation. Dijsselbloem said March 4 they won’t get anything back because a liquidation of the bank wouldn’t have generated enough to pay senior debt investors, let alone junior note holders.
Bondholders who suffered losses can submit their objections to the Enterprise Chamber of the Amsterdam Court of Appeal, which will rule on Dijsselbloem’s decision to set compensation at zero.
To contact the reporter on this story: John Glover in London at email@example.com