Thursday, December 22, 2016

Mps, today comes the decree of Title on the roller coaster – Milano Finanza

On the night Mps has posted a correction on the values of the bond given by the subscribers to the capital increase. And that will then be transformed into actions if the increase from 5 billion to market will really in the port. Therefore, according to the data provided by the intermediaries to the bank of siena at 22 yesterday, total participation in the offers Lme (Liability Management Exercise) from 28 November to 2 December and then from 16 to 21 December were $ 2,451.224 billion.

Meanwhile, this morning in Piazza Affari, the title fails to open by a decrease of the theoretical 6,13%. Then is suspended for more reps. Once readmitted, is subject to a strong volatility and the 10.35 manages to get dell’1,47% to 16,54 euro.

Note, however, that in the coming days, this figure may go down a lot. It declares the same bank remembering in the first row "without prejudice to the effects of the right of withdrawal," I introduced yesterday, together with the Second supplement relating to the prospectus of the operation. And subject to "reconciliation in progress".

Of 2,451 billion, 1,940.624 billion arise from the conversion of the bond subordinate (retail + institutional) and 510,600 million from the bondholders Fresh 2008 (mostly hedge funds). The retail has participated, on the whole, to 1,065.960 billion.

the Mps, therefore, has calculated that the increase will now be of 2,068.867.474 billion. And this should be done through the so-called anchor investor, first of all, the fund Qia Qatar which, it seemed, were to invest a billion euros. However, in the meantime, is paraded.

in Fact, today Siena writes, at the end of the document transmitted to the Italian Stock exchange, that "To the best knowledge of the bank, as of the date of this press release have not taken place expressions of interest on the part of anchor investor".

The operation to increase capital of the bank is complex and is structured on three pillars, each of which must exist for the plan to be successful. The first is the conversion of the bond is subordinated, by which Siena expects about $ 2 billion. The second is the presence of institutional investors covering the difference between the 4.5-5 billion, and as it derives from the conversion.

The third is that the fund Atlas managed by Quaestio Sgr to take charge of the tranche and mezzanine of the npl of the institute, which totalled € 27.6 billion.

Just yesterday, in the Second supplement to the disclosure document showed that the investment of the Atlas in the securities of the junior mezzanine for a maximum of 1,526 billion is subject to a number of conditions. Among these, that “has completed with success the purpose of the proposed share capital increase to 5 billion by the subscription and the payment mainly by market investors (and hence different from the current shareholders)”.

THE STATE. Now, if the bank fails by the end of the month, as requested by the Ecb, to bring to completion the whole operation, must take the State. And at that point the Atlas is removed. Already today, how to remember MF-Milano Finanza, a Council of ministers for approval in quick time to the decree-save banks voted yesterday morning to the majority of the Parliament. And part of the ceiling to € 20 billion will be used immediately to save Mps , which otherwise is likely to fail.

At this point, Mps will have to formally request a financial support from the public, extraordinary, appealing to the european directive Brrd, which requires the use of the burden-sharing, as in the rest of the bank, explained yesterday in the Second supplement.

it Is possible that the first intervention of the government, writes today the press, authorizing the use of guarantees on loans or bond and shall have immediate effect because it serves to resolve the liquidity problem pointed out by the Ecb, which has not granted the extension of the operation until the 20th of January to the risk of failure. The second intervention of the Treasury may be a preliminary study for the recapitalization as a precautionary and ask for a new plan to Siena.

THE BONDHOLDERS. The legislation on burden-sharing, as applied in the past to Greek banks, it should save the account holders and holders of senior bonds. While it should reset to the shareholders and to apply a conversion rate to bonds that are subordinated, may be very heavy. Today there are about 40,000 bondholders in Italy of subordinates, for the most part clients of the bank.

According to a reconstruction of the Republic, the minister of economy Pier Carlo Padoan reportedly studying three alternative solutions. The first is the conversion by force of subordinated bonds in shares, with a price that will be lower and therefore could be expected for a mechanism of integration. The second scheme is to apply to the four banks liquidated a year ago, i.e., the zeroing of the bonds subordinated and refreshments are available to investors. The third solution is the purchase by the State of all of the subordinated bonds.

Whatever the decision, however, must be approved by Europe. And in this sense, the legislation Brrd is clear.

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