Launch in the middle of the night to the decree-law "save the banks", basically a crutch in all public credit institutions in difficulty. Convened to closed markets, the Council of ministers, extraordinary started at 23.35 approved the long-awaited decree law with measures for the protection of the investors provided for by the plan of intervention is put on the field last Monday by the Government to save Monte dei Paschi di Siena.
a Few hours after, the board of directors of Monte dei Paschi – that in the evening he had taken note of the failed capital increase on the market – has initiated the process of nationalisation with the request of financial support the extraordinary and temporary recapitalisation of precaution foreseen by the european directive Brrd. The bank added that, in consistency with the measures of the Government will present a proposal to the retail investors and the holders of the obligation subject to the 2 billion issued in 2008 “to end or prevent litigation” related to the sale of that security.
How does the decree save savings
The bottom 20 billion of additional indebtedness authorized on Wednesday by the Parliament will be used for recapitalisation measures and guarantees on liquidity for the banks that ask, then, is not only for the Mps. The free way the measure is arrived while the Board of directors of the bank of siena was still together in Milan after the certificate, in the afternoon, the failure of increased private capital. A combination that has allowed the same board of directors to immediately activate the procedure for requesting public intervention, as provided by the decree.
Gentiloni decree “salvarisparmio” launched after the ok button of the Parliament
The decree, stressed the chairman of the Board Paolo Gentiloni during a press conference the night with at the side the holder of the Economy Pier Carlo Padoan, “reassures the investors and the future of Mps”. The Government has, in fact, defined in the decree law as a measure “salvarisparmio” based “on the authorization received from the Parliament with a wide majority”. “We have moved as a result of taking note of Mps of the termination of the operation of the market, “concluded Gentiloni – and we agreed with the european authorities the modalities of this intervention”.
Liquidity and recapitalisation, enter the Status
The protection scheme of investors
In the press release issued at the end of the Council of ministers Palazzo Chigi explained the scheme of protection of savers. A mechanism of protection of the
the bondholders subordinated Mps to 100% by assigning them to the first shares and then ordinary bonds: “The decree-law explains,” the government contemplates the possibility that the bank concerned by a recapitalization of precaution on the part of the State, which involves the conversion of subordinated bonds into shares, the offer obligations that are not subordinated in exchange for the shares the fruit of conversion. The Treasury may purchase such shares. At the end of the compensation procedure oriented to protect the savers, those who initially hold subordinated bonds would then have ordinary bonds, are not subject, therefore, to losses. So in summary the compensation scheme: 1. The bank proposes to trade the shares in result of conversion of subordinate d bonds with obligations that are not subordinated to the issue of new shares; 2. The Treasury buys the shares traded with the obligations that are not subordinated to the new issue. The repurchase of shares result of conversion from the subordinated bonds is intended to prevent litigation related to the marketing of the bonds”. You will see now if the scheme is approved by the european Commission. Brussels has always insisted so far on the fact that the bondholders suobrdinati share the costs of the operation and only later be reimbursed if they can prove you bought those products without having the risk profile.
The nodes to dissolve the post save-banks
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Plan by 20 billion authorised by Parliament
The launch of the measure following to the a free Parliament, by an absolute majority, the increase in public debt up to € 20 billion (in a non-structural manner, because the measure save the banks is to be considered one-time) stressed on Wednesday by the Government just to fund the rescue of banks in difficulty. In summary, the decree prepared by via XX settembre discipline the creation of an ad hoc fund (to be financed by the issuance of new public debt securities), which operates on two fronts, the liquidity with the collateral and the assets with the recapitalization, and is intended to support the banks at risk. The new tool is aimed, in particular, to allow the government takeover of Mps – the third in the bank of Italy, considered the oldest credit institution of the world – and the Treasure that is destined to become the shareholder of reference, and then put back the allowances on the market, and vola t reclaimed from the institute. The prop, the audience will take the form of a recapitalisation, “precautionary” and “temporary” in order to reinforce the heritage of the Monte dei Paschi in the frame of the european Directive Brrd, operational from the beginning of 2016, which introduces the principle of the so-called bail-in.
the Mps in voltage, today the board of directors for the closing of the increase in
Failed to strengthen the balance sheet Mps
After the close of the institutional offer, to make official the failure of the operation was a press release issued by the Mps in the early evening. The note has confirmed a collection of low orders of the investment necessary to reach the amount of 5 billion allocated to the strengthening of the balance sheet, despite the positive outcome of the exercise of liability management that has registered the voluntary conversion of subordinated bonds into shares, for a total of 2.45 billion euros. The absence of large investors willing to for a significant investment, has explained to Mps, has had a negative impact on the investment decisions of institutional, limiting significantly the subscription orders. Now the subordinated bonds of Mps is vested in accession to the offerings of the bank, has clarified the note, will be returned to the respective carriers.
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