Wednesday, November 16, 2016

Mps, funds in the maneuver on the bond – The Sun 24 Hours

Disinvest from the actions of the Mps to reinvest bond subordinates, with a view to cover up and make arbitration the seat of the capital increase. This is the attitude we seem to have adopted yesterday, in the last few days, investors of the Mps, especially the hedge fund. It is not a coincidence that the title yesterday tracollato of 10%, to € 0.25, while almost all of the bonds subordinated (11 issues) involved in the voluntary conversion by 4.2 billion which will start on 28 November, with all probability, have registered the price increases of around 1-2%. The conversion operation has been designed to be attractive in the eyes of the bondholders: for the seven titles, Tier2, the offer price is 100% of the nominal value, while f or the three bond Tier1 is 85%. Depending on the issue, the offer price implies a premium of 25-35% on the last price. Here the interest of institutional investors. Difficult to predict what will happen to the title after the conversion, and then in the seat of the capital increase.

A high acceptance of the offer of conversion assumes a “fundamental importance”, as acknowledged by the bank itself, because it will reduce the amount of the recapitalization.

on The other hand, if the conversion “did not have a satisfactory outcome”, and skip the commitment of the consortium to guarantee that it should subscribe to any inoptato. And as from the deconsolidation of over 27 billion Npl not escape – it is imposed from Frankfurt – and as this step requires, however, a capital increase of 5 billion, it is not excluded that to cover this requirement it was necessary to resort to the intervention of competent authorities and their “extraordinary actions”, which include the risk of bail in, with the involvement (this forced) shareholder and bondholder in the recapitalisation of the bank.

the theme of the conversion of the bond, of particular interest to many institutional investors, who will have to make reference to the dealer manager appointed yesterday by the bank for their conversion ” (Jp Morgan, Mediobanca, Santander, Citigroup, Credit Suisse, Deutsche Bank, Goldman Sachs, Merrill Lynch, Mps Capital Services).

Among the subjects, instead, interested in the conversion, one of the most important is the Attestor Fund, around which had coagulated the other funds to the holders of the bonds for a little less than a billion euro, that is in particular the conditions relating to the conversion of the bond Fresh, which should be notified by November 25.

Interested in the hypothesis conversion is also General. The dossier has already made a step in the board of directors of the first insurance in the country. A first important result: the board has determined that the eventual decision to join the conversion will be done hand in hand with the cancellation of the commitment in Atlas 2. The company had decided to allocate up to eur 200 million to support the new initiative system stabilization credit in Italy. In doing so, however, he had basically put in black and white a picket: that money was "guaranteed" only in the case in which the Mps had not been given for the conversion project. It was not so, and now the Lion does not intend to expose himself on a double front: equity and npl. Given the recent news, therefore, the theme of the adhesion or not to the offer will be addressed in a new decisive council. Board that in all probability will be held in the valley of the extraordinary general meeting of the Mount of the 24th of November. After the bank, however, has cashed in the go-ahead of the Ecb on the content of the conversion offer today directed only at retail but soon, with the seal of Frankfurt, and is extended to the institutional. Only once you have stored these two formal steps, the General will be able to officially take a position. Having clear, however, is a fundamental principle, already expressed the 30th of September last, from the ceo Philippe Donnet in an interview with The Sun 24 Hours. To the question on the participation of the Leone to the possible conversion of the subordinated, the ceo replied, “When there will be submitted to the project we will examine it and take appropriate decisions. Always in the interest of our shareholders and our policyholders”.

The theme is delicate. The group holds about 400 million shares and the conversion of bonds into shares proietterebbe Trieste between the first major shareholders individual the bank of siena. In fact, the company could have up to 7-9% of the institute led by Marco Morelli. An important share and for several reasons. First of all, that the General would become a shareholder of the weight of a bank, which, among other things, an agreement of insurance with another key operator in the sector of the insurances: Axa, already a member of the Mount with the 3,17%. The partnership own, in these weeks, is in a phase of redefinition since it is expiring in march 2017. It is not an understanding marginal because, according to the latest data, that is between the damage and the life,the 4,4% of the market policies in Italy and in the first half of 2016, has guaranteed a dividend of approximately euro 40 million to the institute. A figure, in descent compared to the more than 60 million in th e previous year, but still significant when you consider that Mps has closed the six months with profits of just over 300 million. However, the failure to renew it could cost the pockets of the bank, a figure quite round. According to the latest estimates from the Mps itself, and in a recent statement, the value of the equity investments amounts to eur 950 million. So much so that, any difficulties with the company transalpina might imply for the bank something like 750 million euros to be paid to the French group. Similarly, Axa, without the agreement with the Monte, is at risk of losing the slice key of the turnover, which here generates.

In the middle there are the General: can the group become a shareholder in the key of a bank that distributes the policies of another company? The whole issue obviously requires in-depth analyses that might lead to moves unexpected by the Lion.

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