Pimco, Anchorage Hire Law Firm After Banco Popular Bond Losses

A group of Banco Popular SA bondholders hired Quinn Emanuel Uruhart & Sullivan LLP to challenge a forced write down of the Spanish lender’s junior debt, according to a statement from the law firm.

Pacific Investment Management Co., Anchorage Capital Group, Algebris Investments and Ronit Capital are among the investors, which held a “material percentage” of Banco Popular’s additional Tier 1 and Lower Tier 2 bonds, the firm said in the statement. 

Regulators forcibly sold Banco Popular to Banco Santander SA on June 7, wiping out about 2 billion euros ($2.3 billion) of junior bonds that had traded at face value as recently as April. Pimco held about 280 million euros of the affected notes, according to regulatory filings at the end of March. New York-based Anchorage lost about $140 million in its main fund, a person familiar with the matter said earlier this month. 

“We will be reviewing the resolution scheme and the events leading up to the decisions taken and, where necessary, bringing claims to restore the position and/or to seek damages,” Richard East, lead partner at Quinn Emanuel in London, said in the statement.

Spokespeople for Banco Santander, Pimco, Anchorage, Algebris and Ronit declined to comment on the plans.

Wiped-Out Spanish Bank Notes Turn Lottery Ticket for Traders

Some traders have bought the bank’s riskiest notes on speculation of a successful legal challenge. Banco Popular was the first European bank to suffer a forced sale under the European Union’s bank resolution scheme. The deal was structured to protect taxpayers from rescuing the bank.

— With assistance by Esteban Duarte

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