The State shall guarantee the strengthening of the balance sheet of Monte dei Paschi, with a maximum investment of approximately € 7 billion, acquiring an absolute majority of the share capital of the Bank. To determine the exact amount of recapitalization “precautionary” at the expense of the State, and materially will be done between three or four months, will be the supervisory Authority of the Ecb, on the basis of a plan for the restructuring and strengthening of the balance sheet, which will be presented by the bank of siena. The plan will redefine the time and the mode of disposal of non-performing loans. And must also pass the scrutiny of Brussels, yesterday, has, however, welcomed the decree launched the other night by the executive, to verify compliance with the rules on State aid.
Protection for small investors
The directive Brrd, which admits the recapitalisation measure of a bank provides that public intervention is not possible to go beyond the requirements of the capital emerged from the negative scenario of the stress tests of the Ecb. In the case of Monte dei Paschi, that after the decree has now formalised the request of the intervention, this is just about 7 billion euros. A sum that will be used by the government to subscribe for new shares of the bank of siena and, as expected, the decree signed yesterday by the President of the Republic, to detect those that will be given in exchange for the small bondholders subordinated, which shall be paid for with bonds and ordinary shares (expiring in 2018, as the old titles). The small bondholders of Monte Paschi, on the assumption of a deception on the part of the bank in the sale of the securities, should recover the entire amount invested and subtract the accrued interest to date. While institutional investor s get to see their subordinated converted into shares at 75% of the nominal value reduced to of the interest. According to the principle of the burden-sharing, that is, the sharing of expenses, provided for by the Eu directive and called upon by the president of the Eurogroup, Jerome Dijsselbloem. The market value of the shares and of the bonds of the Mps, in any case, will remain frozen, as it has been established yesterday by the Consob, to the definition of the plan of recapitalization.
Warranty on liquidity
The umbrella of the State on any increase of capital-at-risk of banks as envisaged by the decree, which can count on a budget of 20 billion, will remain open throughout 2017. While it will be extended six months, until next June, the mechanism to ensure the liquidity and the government guarantee on the bond issues of the banks. The Eu Commission would have already given assent. “The intervention of the state was definitely not our first option, but it will give us the opportunity to proceed with the disposal of non-performing loans and to have a stronger position,” commented Mark Morelli, managing director of the Mount, that yesterday has closed an agreement with the trade unions to define 600 redundancies with early retirement. The president of Abi, Antonio Patuelli, has deto a substantially positive judgement of the decree. For the rating agency Moody’s reduces the risk of contagion to the system, but for the Standard and Poor’s does not resolve the underlying problems.
December 23, 2016 (change on December 23, 2016 | 22:47)
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