Montepaschi, fails the private level – Milano Finanza

The script seems to be already seen in the spring with the Popolare di Vicenza and Veneto Banca. Only in this case, the credit institution involved is not a popular medium in size, but the third bank of the Country, with 160 billion in assets and more than 25 thousand employees. As in the previous veneto, a capital increase has failed miserably on the market, with membership levels next to zero. The similarities however end here, because if the white knight of Bpvi, Veneto Banca was the bottom of the Atlas, for Mps the parachute will be public with the direct intervention of the Treasury in the share capital of the bank (article on page 3).

Yesterday, the council of administration has raised the white flag in the light of the outcome of the increase. The private placement, the last piece of the equity reinforcement operation, it is closed at 14 and the board took note of the results in a long meeting long-term project until late in the evening and then suspended in expectation of the decree of the Treasury. “The capital increase operation,” explains a note, “has not closed successfully. Were not collected, investment orders sufficient to reach the amount of 5 billion”. The bank has not announced the details of the results of the transaction, but market sources suggest that the level of acceptances has been “very low, to the point that the offer has been almost deserted”. The fail was in the air from Monday, the 19th, for a competition of reasons. On one hand, the absence of anchor investor, such as the sovereign wealth fund of Qatar, has discouraged investors at a stage where you c an already look with some distrust of Italy. On the other hand, there is no doubt that, at the issue price of 1 euro, the new shares were still too expensive for a bank as a Mount. Suffice it to say that the multiple of price/ tangible book value post money is estimated to be around 0.58 and-0,56, above the average of Italian banks. The third factor not to be underestimated was the time. Mps has tried to collect 4 billion on the market in less than a week, taking advantage of the uncomfortable window of time in which the end of the year.

A nothing is served the outcome quite encouraging of the liability management exercise that, in its two-tranche, has yielded to the bank of approximately 2 billion

euro for the purposes of the capital increase. The conversion was in fact conditioned to the positive outcome of the recapitalisation and is automatically revoked for the failure to achieve the threshold of 5 billion. “The non-completion of the increase,” says the note, “entails the loss also of the securitization transaction and of the overall exercise of liability management on subordinated liabilities issued or guaranteed by the bank. Titles awarded in adherence to the offerings of the lme will be sent to the respective carriers in the terms set forth in the relevant offering documentation”. It is not excluded, however, that the securitisation of the € 27.7 billion of suffering, may be restored to in walk, also in the light of the renewed commitment by the Atlas. The operation is assisted by a bridge loan of 4.7 billion with a pool of banks composed by Mediobanca, , Jp Morgan, Credit Suisse and Hsbc (Citi, it would show to the last, perhaps, to fears about the negative outcome of the rescue plan). “If the operation will remain in the foot, we are,” said a banker with one of the institutes involved. Technically, the structure of the securitization could be confirmed, even if the decision must be taken by the Treasury. That yesterday Mps has stressed that “investment banks are involved in various capacities in the consortium for the placement, and in the securitization transaction, including Jp Morgan, Mediobanca and , will not receive any commission,” says the note. Today, in the meantime, in the stock exchange the securities of the Monte will remain sus pended as a precaution. (reproduction reserved)