The conversion of the bond Mps close to over 2 billion, more than the expectations. Away for free to 20 bn of the government to the banks – The Republic

the MILAN – The conversion of the bonds subordinated Mps seems to have gone better than expected, and beyond the provisions introduced by the bank of siena in the prospectus. A few hours after the conclusion, and pending a press release, is from market sources that the membership of the voluntary to the exchange offer of the bonds in shares were approximately 2.5 billion in nominal value, equivalent to just over 2 billion of new capital to be issued in the increase of private array of up to 5 billion, that the Mountain is trying to the last minute to avoid the saving public. The total amount of the bond on which it was the offer was 4.3 bi llion. The approximately 2 billion delivered for the conversion stock would be the result of half, a billion-to-head, between the bearers of the matrix of the institutional and the audience of 40 thousand customers of the Mps who had signed the title, maturity 2018. Then there would be 200 million at the end of the bond Fresh, whose contribution to the capital is, however, limited.
If these will be the values, are higher by accessions 40% estimated by the bank, driven by Marco Morelli. Unfortunately, however, the signals of the capital increase on the market, called to collect a large part of how much remains to reach the goal of 5 billion, seem to be negative: the new investors, from fund of Qatar, is still not seen, and the increase ends tomorrow afternoon.

The story is followed with maximum attention by the Treasury, with the minister of Economy, Pier Carlo Padoan, who calms the retail: “The impact on savers, if you were to give life interventions (public, ed), would be absolutely minimized or non-existent”. The study, in the case of State aid, there is the conversion of the bond is subordinated, but the rest of the “small” investors. Speaking of the “save-savings” in Parliament, where the government got the go-ahead to issue 20 billion of debt in most of the interventions on banks, the minister said that “this measure strengthens the capacity of the Italian system to grow and be consolidated and growth will be a further element facilitator of the banks ‘balance sheets”.

The rise in complicated. on Thursday, the market operation of the Mps will close permanently and the numbers will tell if the plan by 5 billion went into the port. But already today, you will know how many chances of success are there: the prospects are not rosy for the equity component. With regard to the conversion of the bond, it seems to have been made to the titles for a billion; with a billion already raised in the previous conversion period, you get exactly 2 billion. In the amount they are including a 200-million conversion of the securities is Fresh, in possession of some funds. But the daunting task is coalizzare the energies of the private investors on the capital increase: Qatar, which had to be l’anchor investor on which to build a good part of the operation, it seems you let them be lost.

From the supplement to the prospectus of the Mountain published in the meantime in the morning, reveals a worsening of the liquidity situation: the location is positive for the next four months, while a few days ago the bank had declared a cash positive to a perspective of eleven months. And again: “there is no certainty that the State should intervene and where to intervene, there is no certainty about the mode of that intervention and the amount”. As to the intervention of the Atlas, from the document it emerges the condition that suspends the operation of the fund and on the sufferings (be the sale of a package of 27 billion) in the case of a State’s participation in the capital increase of more than 1 billion euro, or in the event of termination. The same fund Atlas is busy on the veneto side: today has officially announced that it will intervene again to support the capitalisation of the Pop Vicenza and Veneto Banca, which is the majority shareholder of: by January 5 will provide 938 million (628 for veneto banca, and 310 for the popolare di vicenza) “in the account for future share capital increase”.

20 billion to the State. waiting to untie these knots, in the Parliament, proceeds with the process that will enable the government to borrow 20 billion of debt in the most – based on the accounts of the 2017 – to be used in the context of public support to banks in difficulty. From the Bedroom came the following year, to this deviation of the budgetary targets, with 389 votes, and the minister Padoan has asked to add to the text of the clear, “in a framework of extensive sharing of the implementation measures with all the parliamentary groups”. The favorable opinion also came from the Senate, which has approved the resolution of the majority with 221 yes, 60 no, and 3 abstentions.

the intervention of The government – it was explained after the cdm has approved the request for variation of the public budget – will support the liquidity of financial institutions and direct intervention in the recapitalization. Already for the Monte dei Paschi, if necessary in the next few hours will trigger a decree ad-hoc. But according to the financial analysts of Bloomberg, is likely to be an umbrella too small to repair the banks from the storm of write-downs tied to the sale of impaired loans in the belly of the institutes: the shortage of capital, if you consider the potential provisions to cover the write-downs related to the sale of receivables, would amount to 52 billion, two and a half times the amount placed in the pot by the government.

graphics Bloomberg shows how a real cleaning of bank balance sheets of Italian by non-performing loans would need to shell additional 52 billion

the estimate of The U.s. agency includes the 8 billion that Unicredit will have to rectify in the balance sheet before selling the package of eur 18 billion, of suffering, as detailed in the recent plan, and use this proportion as a reference point (a “proxy”) for the entire banking system. According to a report produced by the Italian branch of Deutsche Bank, but dating back to 24 November last year, and then before three weeks to the plan launched by the bank in Piazza Gae Aulenti, if all banks were to decide to bring to 75% the coverage of claims more difficult (lining up their price to that made from the market), and 40% of those of the other categories of loans at the level of the system it would take 52 billion to cover the immediate cleanup of the balance sheet. It is, it is good to specify a number that emerges from the data published by the bank of Italy (last June). From this amount of capital must be subtracted the operations of capital strengthening undertaken, like the 13 billion increase in Unicredit’s own, and that it’s reasonable to think you can complete successfully on the market. We must also consider that other banks do not have immediate need to sell packages of suffering (having regard to the level of “cleaning” of their budget), and that even if they decide to do so they could proceed with the operations of the market. It is estimated then, that the Italian banks – if called to do so – to collect twenty billion, with private operations. Reason why the slice of public coverage would fall in the order of 30 billion and, therefore, less far from the 20 to now put on the plate by the Treasury.