Monte dei Paschi considers subordinated debt issue to win ECB nod on bad loans: report
Reuters
Published Aug 06, 2020 03:59AM ET
MILAN (Reuters) - Italy's Monte dei Paschi di Siena (MI:BMPS) could issue a Tier2 subordinated bond worth up to 300 million euros ($356 million) to boost capital as it works to win the ECB's approval for a planned spin-off of its bad loans portfolio, daily Il Sole 24 Ore said on Thursday.
The troubled bank in June approved a plan to offload around 8.1 billion euros ($9.6 billion) in bad and unlikely-to-pay loans to state-owned bad loan manager AMCO, in a move that could make it more attractive for a possible re-privatisation.
However, to allow the deal, the European Central Bank has told Monte dei Paschi di Siena it has to strengthen its capital base by around 700 million euros, two sources close to the matter have said.
The report said the bank has already had informal contacts with the ECB for a preliminary green light on the 200-300 million euro bond issue.
Monte dei Paschi declined to comment.
The bond issue, which is expected in September or October, could tap a public guarantee scheme or be partly covered by Italy's Treasury, the paper said.
Rome, which currently controls Monte dei Paschi with a 68% stake, has set aside up to 1.5 billion euros to buy into possible capital increases at state-controlled companies, according to a draft of a new stimulus package to help recovery after the coronavirus crisis.
Get The News You Want
Written By: Reuters
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.