"Worst trade of all time" pits Santander against Portuguese client

Interest rate swap with €79 million notional is nearly half a billion euros underwater

A Metro train passes over the D. Luis bridge in Portugal

"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 firm is now out-of-the-money to the tune of €459 million and desperately hoping for Euribor to

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