Portugal-based Novo Banco SA priced €400 million of tier 2 subordinated debt, the bank announced June 29.

A total of €258.8 million was raised from bondholders exchanging existing senior debt for the new notes while another €141.2 million was placed through additional new notes.

The offer allowed bondholders to redeem the notes either by exchanging them for cash or with the new Tier 2 bonds it is issuing. The new notes, which carry an annual yield of 8.5%, are expected to be settled July 6.

Novo Banco was created in 2014 to take over the good assets of Banco Espírito Santo SA.