Tuesday, November 29, 2016

Mps, the doubts about the plan: risk bail-in, the inspection, the Ecb and the need to “meet” the other banks – The Republic

MILAN – entry in vivo, the first phase of the recapitalisation/bailout of the Montepaschi, with the voluntary conversion (the new shares of the Mountain) 4,289 billion of the nominal bond: it is just one of the blocks and, to go in the port, at the end, the overall budget of the maneuver must bring into the coffers of the world’s oldest bank € 5 billion of means-fresh, also considering the increase of capital proper, and the surgery – for now, only the hoped – for investors, the strong, the so-called “anchor investor” (that should put hand to the wallet for important number s). From the conversion of the bond, the bank expects roughly a billion, could reach up to a billion and a half. In the meantime, the market continues to carry the title of the Mountain on a roller coaster: after strong sales on Monday, coinciding with the start of the conversion operation, the action of the Mps looks for the rebound.

The risk of bail-in. The uncertainties are not small, and remember the same Prospect of conversion of the bonds, addressed to the investors who over the years have subscribed for the subordinated bonds of the Mount. The main one is that if the entire maneuver is not successful, there is the risk that the bank is subject to resolution measures, the now infamous eu Directive that provides for the involvement of shareholders first and to follow of the bondholders in the settlement of the losses; the most severe of these measures is that the “bail in”. But it is not the only challenge: the warnings to investors remind us that it is still in the course of the inspection of the Ecb on the credits of the Mount. The conclusions will only arrive in the first half of 2017, for the capital increase already carried out, but depending on what certify Frankfurt am main, may still be “a significant impact on the balance sheet, economic and financial position of the bank”, even with “reflections on the continuity of the company.

The unknowns of the plan. Of the rest, also made the strengthening of the balance sheet, the bank must put into practice the next step and that is the realization of the industrial Plan (presented at the end of October). On which, by definition, there are no certainties, and indeed the Monte admits that “some assumptions are challenging compared to the results achieved by the group,” while other items are outside the control of the bank. That, in fact, has more than a few problem: the Ecb in June last, had stressed that the Mountain has lived through difficult times on the front of liquidity (“situations of liquidity stress”) in the early months of 2016; some measures were meanwhile taken, but he still remembers the Prospectus of the bonds, to 30 September, direct deposits was less than 14 billion compared with the end of 2015. The bank is subject to civil cases millionaire moguls: about 8.5 billion (a 3.9 for the cause promoted by Adusbef and Codacons) to which the Mps has shelved 627 million to the risk fund.

The uncertainties of the consortium. For now, as is well known, 13 banks have signed an agreement of pre-underwriting. To become a true consortium of guarantee it is necessary that there is another condition: that the three stages that make up the process of strengthening of the capital have had a “satisfactory” in the opinion of the banks that make up the consortium. Therefore, that is was “satisfactory” the conversion of the bonds into shares, and that, just as has been the task of marketing to investors, as well as that is well established, the activity of the deconsolidation of the non-performing loans. The Statement stresses that have not been listed parameters, qualitative or quantitative, to identify “the extent of the degree of satisfaction on the part of each of the members of the consortium.

protections to investors. Conscious of the delicacy of the operation – to ask the investors to turn bonds into shares – the bank has, however, adopted a series of safeguards details, including the inability to change your profile Mifid (faith is the completed questionnaire by 30 September, or the next, if it is more restrictive) and the fact that the Mountain has pledged to have “an attitude not proactive, and refrain from recommend or advise the acceptance of the Offer”.

Topics:
securitisation
montepaschi
prospectus
Mps
capital increase Mps
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