Monte dei Paschi Junior Debt rallies Anima’s support for fundraising

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MILAN, Sept 13 (Reuters) – Monte dei Paschi di Siena (MPS) junior bonds (BMPS.MI) rallied on Tuesday, adding to the previous day’s gains, buoyed by news of possible interest from investors for an expected amount of 2.5 billion euros (2.5 dollars). billion) cash call.

Shares of MPS gained 19% on Monday and its subordinated debt rose after sources said state-owned bank business partner Anima Holding (ANIM.MI) was ready to play a role in raising capital.

MPS’s junior debt has come under pressure in recent weeks over fears it could be converted into equity to help the Tuscan bank raise funds to cover restructuring costs.

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MPS CEO Luigi Lovaglio is working to complete the new share offering by mid-November to fund costly voluntary layoffs, but turbulent markets cast doubt on his ability to pull it off.

MPS junior bond prices had fallen to trade at less than half face value as bankers and analysts said the lender would struggle to find investors at a time when recession fears and instability Italy’s politics hammered bank stocks.

Italy has pledged to cover 64% of the 2.5 billion euros based on its stake in the bank, but MPS must also secure private funds to comply with European Union rules on state aid to banks.

Italian asset manager Anima is reportedly ready to provide up to 250 million euros in capital to MPS as part of an enhanced partnership with the Tuscan bank, a person with knowledge of the matter previously told Reuters.

CEO Lovaglio has not yet entered into talks with Anima or France’s AXA, MPS’s insurance partner, who may also consider revising their business deal in return for an upfront cash contribution, another person says. close to the file.

Lovaglio had said in June that he wanted discussions around the fundraising to be separate from those on partnerships.

Bankers working on the capital raise say the tightening of trade deals would make it harder for MPS to seek a merger with a healthier peer in the future.

As of 1527 GMT, a July 2029 bond issued by MPS gained 3.38 percentage points to 55.25, yielding 24.6%, according to Refinitiv data. A September 2030 bond rose 3.88 points to 54.625, yielding 37% ($1 = 0.9839 euros)

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Reporting by Valentina Za, editing by Agnieszka Flak and Keith Weir

Our standards: The Thomson Reuters Trust Principles.


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John A. Bogar