Santander Says Portugal Owes $1.6 Billion on `Snowball' Swaps
- State-owned transit companies defaulted on hedging derivative
- Firms say derivative sold by Santander broke Portuguese law
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A Banco Santander SA unit told a London judge that four state-owned bus and metro companies in Portugal defaulted on a type of interest-rate hedging derivative known as a “snowball.”
The transport companies agreed to the deals between 2005 and 2007 “freely and with full knowledge,” Santander’s lawyer Laurence Rabinowitz said on the first day of a six-week trial.