Thursday, July 28, 2016

ECB in the verdict of Siena and the plan of 5 billion – Il Sole 24 Ore

Now the informal opinions are no longer enough. The maxi securitization with Atlas and the increase “reparative” from five billion Monte dei Paschi needs an endorsement written and signed by the ECB, which now brings together – just to examine the dossier Siena – the Supervisory board. At Rocca Salimbeni they hope not only they get good news, but also receive them in the evenings, to avoid another night of passion and to make sure that tomorrow the board of directors – convened for 10.30 – can begin on the right foot a river meeting the agenda that sees the half-year but above the bailout.

After the contacts with the ECB on Monday and Tuesday, terminative see the Sun yesterday – with the delivery of a final version of the plan of recapitalization Npl and yesterday we worked on the details. Ie on the securitization of loans on the one hand, where Atlas II will be called to do the lion’s share, and the underwriting syndicate on the other. In this case, as well as JP Morgan and Mediobanca (global coordinators of the operation), there are other four investment banks (Bofa Merrill Lynch, Credit Suisse, Citi and Goldman Sachs) and at a later stage could be called on other institutions to act as joint bookrunners.

in the last proposal sent to Frankfurt the maneuver, as mentioned yesterday, is 5 billion: of these, as is evident, about two serve to increase the covers on the impaired who will remain in belly to the bank and 1.6 to cover losses on receivables sold 26.6 billion to Atlas (at a price that could be equal to 32% of book value). The remaining 1.4 billion will instead be used to capitalize the SPV, the Special purpose vehicle that will buy the suffering and will make securitization.

At the start, therefore, the sole shareholder of the bad bank will be the Mps same: to unbinding the Npl, however, making the so-called derecognition, the bank will have to discard them quickly; and that’s the most simple and quick solution seems to be that which provides for the allocation of securities to existing shareholders of the Mount, so that if they see them thus allocated pro rata. A kind of warrant, which may be reserved – and perhaps still in the future – some nice surprises in case the recoveries of securitized loans proceed in the best way.

However, the plan, which does not provide for any public intervention , in fact it stands only if the ECB decides to freeze existing internal models of banks, that is, the method of accounting (with related provisions) of the NPL. This is the decision today will have to take the Supervision: if were to get a negative response, for Monte would take effect the need to increase the increase of two billion. Blasting the entire scaffold. A scenario not impossible but yesterday considered least likely no accident yesterday on the Stock Exchange the title of the bank rose by 2.66%, to 0.28 euro.

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