Portugal Gets EU Approval to Inject $5 bln Into Ailing Bank

http://www.cnbc.com/2016/08/25/portugal-minister-on-bank-recap-plan-this-is-another-big-step-for-our-financial-system.html


The plan was agreed late on Tuesday afternoon. It would see Portugal pump up to 2.7 billion euros of state funds into Caixa, transfer 500 million euros of its ParCaixa shares to Caixa and convert 960 million euros of contingent convertible bonds into equity.
...
Meanwhile, Caixa will issue highly subordinated debt worth around 1.0 billion euros that will be compliant with regulatory capital ratios designed to bolster banks' ability to withstand financial shocks.
This follows negotiations with Brussels officials, aimed at ensuring the plan is not viewed as state-aid to the bank, which would add to Portugal's problematically high budget deficit.
Although the government would put money into the bank, the hope is that the returns for the state would outweigh the cash injection.


Uh-huh. Since now we're obviously about to go into an economic boom period, we're sure the Portuguese government will make money on this definitely-not-a-bailout cash injection...