"Worst trade of all time" pits Santander against Portuguese client
Dealers settled a crop of disputed derivatives trades with Portuguese state-owned entities last year, with one exception – Santander is set for a court battle with the country’s state-backed rail operator, over a trade that critics describe as “nonsensical”. Tom Osborn reports
"This is a contender for the worst trade of all time,” says one London-based corporate hedging adviser. It sounds harsh until you look at the numbers.
The counterparty stuck on the wrong end of the trade is Portuguese state-backed rail operator Metro do Porto (MdP), which entered into the €89 million amortising fixed-for-floating interest rate swap in 2007. Halfway through the contract’s life, the
Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.
To access these options, along with all other subscription benefits, please contact info@risk.net or view our subscription options here: http://subscriptions.risk.net/subscribe
You are currently unable to print this content. Please contact info@risk.net to find out more.
You are currently unable to copy this content. Please contact info@risk.net to find out more.
Copyright Infopro Digital Limited. All rights reserved.
As outlined in our terms and conditions, https://www.infopro-digital.com/terms-and-conditions/subscriptions/ (point 2.4), printing is limited to a single copy.
If you would like to purchase additional rights please email info@risk.net
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. As outlined in our terms and conditions, https://www.infopro-digital.com/terms-and-conditions/subscriptions/ (clause 2.4), an Authorised User may only make one copy of the materials for their own personal use. You must also comply with the restrictions in clause 2.5.
If you would like to purchase additional rights please email info@risk.net
More on Risk management
Asian firms betting on exemptions from UST clearing mandate
Hoping for relief on extraterritoriality, 51% of Apac firms have yet to start compliance programmes
HSBC’s Orion sees cash leg challenge to tokenised bonds
Tradeweb and others agree more work needed before atomic settlement is achieved
Month-long power glitch hits key Apac trade surveillance tool
Nasdaq’s alert functions were restored, but users say testing and calibration tools still disrupted
Why resilience goes beyond risk at StanChart
Risk Live: Reliability is “a business goal” that can involve difficult trade-offs, says Americas CEO DeFilippo
Agentic risk management could arrive ‘sooner than we think’
Risk Live: Models are capable, but banks lack platform and governance to safely run agentic systems
Supervisors becoming more demanding, say ERM teams
Risk Benchmarking: More than half report rising supervisory contact, despite unchanging requirements for an ERM function
Asian dealers may be more exposed than US in AI selloff scenario
Prime brokers face regional counterparty risk from huge flows in leveraged ETFs, say risk managers
Banks upgrade liquidity tests to cope with volatile world
Risk Live: Greater need to assess modern threats from technology transformation
