Monte dei Paschi fails to swap debt of €1 billion
Shares of troubled Italian lender Banca Monte dei Paschi di Siena SpA (MPS) extended losses on Thursday after the management acknowledged in a statement it cannot go forward with the debt-to equity swap plan for so-called Fresh securities. The press release cites regulatory issues and tight deadlines and indicates the intention to execute the operation at another time.
The notes issued in 2008 with nominal value of €1 billion were purchased by a consortium headed by Attestor Capital LLP with the intention to become a shareholder through the proposed program, La Repubblica said in October, quoting unnamed sources. Meanwhile, other reports indicated talks with MPS failed. The bank's owners adopted a rescue plan worth as much as €5 billion on November 24, including measures for consolidation and issuance of debt.
MPS stocks dropped 2.33% to €20.9 at 1:17 p.m. CET in Milan, compared to a decline of 0.33% in the benchmark FTSE MIB index. The bank lost 85.9% of its value in the past year.