Mps, offer to purchase subordinated bonds for approximately 5 billion – The Republic

MILAN – Mps today announces the launch of a public purchase offer on 11 subordinated bonds, for a total value of 4.289 million, with the obligation for the members to reinvest the proceeds in share capital increase of 5 billion. It formalizes a note of the bank. The rates of conversion are set to 85% of the nominal value for bonds Tier 1 and 100% for bonds Tier 2, with the exception of a small obligation to which the repurchase will be offered 20% of the nominal value.

the Mps is also considering the possibility of promoting a conversion operation also on the title hybrid Fresh from a 1 billion euro, in relation to which “there are in course some insights of a technical nature, which we expect to conclude shortly, as well as an exchange of information with the Supervisory Authorities in relation to the profile regulation and impacts of prospective”. The conversion of the bonds subordinated shares is intended to cover part of the five-billion-euro capital deficit that will be generated from the operation of the deconsolidation of the € 27.7 billion of sufferings, and the rise of the coverage on the remaining impaired loans that are to remain in the belly to the Mps.

If the conversion of the bonds subordinated shares Mps “you do not have a satisfactory outcome”, the consortium banks could escape the commitment of ensuring the eventual inoptato of the increase from 5 billion, with the result that Mps “would not likely” to close the recapitalization. And if this happens, Mps could be subjected to “extraordinary actions on the part of the competent Authorities, which may include, among other things, the application of the resolution tools”.

the Mps warned the owners of the bonds subject to which it is addressed the offering of voluntary conversion into shares, that if the capital increase from 5 billion to fail, the securities may be subject to reduction in face value” or “forced conversion” of shares, according to the criteria and in the order stipulated by the legislation on the resolutions bank. If the safety fails and the Mps was not able to comply with the capital requirements” requested by the Ecb, explains the bank, in a note, the institute siena “could suffer serious harm to its business, up to compromising the existence of the necessary conditions for the continuity of the company, as well as important negative effects on the economic, equity and financial”. Failure to comply with the capital requirements may result in the application of the resolution tools “that provide, among other things, the possible forced conversion of the subordinated securities”. For t he Mps an “high adherence” to the proposed conversion assumes “fundamental importance” for the success of the capital increase because “it would reduce the amount of recapitalisation to be placed sl market, with the result that “increase the odds of success.”

Mps “provides that the period of acceptance of the offer” for the conversion of the bonds subordinated shares, “to be agreed with Consob, may begin by the end of November”. The start of the offer, he still remembers the bank, in a note, is also conditioned on the approval by the extraordinary shareholders ‘ meeting of 24 November of the share capital increase of up to five billion euros.

the Mps recalled that the conditions to which it is subject, the commitment of the banks to subscribe the contract of guarantee of the inoptato of the increase is “the satisfactory completion of the LME (liability management exercise, i.e. the conversion of the bond, editor’s note) according to the judgment, in good faith, of each of the members of the Consortium acting as joint Global Coordinators”. “It follows that – the note continues -where the LME does not have a satisfactory outcome, according to the judgement, in good faith, of each of the members of the Consortium acting as the joint Global Coordinators, would be less also the commitment of the Guarantors to sign a contract of guarantee” on the inoptato and “and therefore” Mps “would not be expected to carry out the Increase. If the increase were not completed Mps “could not complete the deconsolidation of the Portfolio of NPL” i.e. of doubtful loans. “ ;This” – notes the bank may cause the same to become subject to extraordinary actions on the part of the competent Authorities, which may include, among other things, the application of the resolution tools referred to in D. Lgs. 16 November 2015, no. 180″, which has transposed the european directive on the resolution of banks.

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Mps

the capital increase mps

subordinated bonds

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