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Espirito Santo downgraded by rating agencies

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Espirito Santo downgraded by rating agencies

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For the second time in a week, credit rating agencies have downgraded Portugal’s largest lender Banco Espirito Santo (BES) and other parts of the Espirito Santo family’s business empire, citing concerns about bankruptcy.

Moody’s cut the rating of the holding company Espírito Santo Financial Group by two notches from Ca to Caa2, moving it deeper into junk territory.

Hour earlier, Standard & Poor’s downgraded Banco Espirito Santo to B minus, because of the knock-on effect of another of the family’s companies not having paid the nearly 900 million euros it owes to Portugal Telecom.

The Espirito Santo family’s business empire is in disarray since the emergence of accounting irregularities at one of its holding companies, putting Portugal and the family-founded bank Banco Espirito Santo under pressure because of uncertainty about potentially destabilising losses.

with Reuters