Pimco and others bondholders in Novo Banco have said they would rather buy the Portuguese lender themselves, threatening to scupper a sale of the bank to private equity group Lone Star Funds, write Margot Patrick and Patricia Kowsmann for The Wall Street Journal.

Under a deal struck in March, Lone Star agreed to inject €1bn for a 75% stake in the lender, with its current owner, a Bank of Porugal-run resolution fund, retaining a 25% share. One condition was that bondholders pay another €500m by swapping senior bonds for new notes.