[ad_1]
The issue will be a non-exchangeable Tier2 of 10 years for the first 5
The issue will be a non-exchangeable Tier2 of 10 years for the first 5
2 ‘reading
Orders of over a billion are currently being placed for the Monte dei Paschi Tier2 bond loan. The issue will be a non-refundable Tier2 for 10 years of the first 5 and will have an amount of 300 million euros. The yield was set at 8.5% per annum. Initial guidance was in the 9% area with a maximum expected amount of 250 million. The banks involved in the transaction are Morgan Stanley, Barclays and Mps Capital Services.
The bond, which was priced in the afternoon, will be rated Caa1 by Moody’s and CCC + by Fitch. The issue expires on September 10, 2030 and the first redemption date is September 10, 2025. The issue is part of the Emtn issue program announced in July.
The sale of the bond loan is one of the conditions established by the European Central Bank to authorize a NPLs (problem loans) sale plan aimed at helping the government of Rome find a buyer for the bank.
The Italian state owns 68% of the Tuscan bank after the 2017 bailout and has to sell that stake by the end of next year under the terms of the bailout negotiated at the time with the EU competition authorities.
The term “Tier 2” refers to one of the components of a bank’s required reserves. It is designated as the second tier of a bank’s assets and is made up of items such as revaluation reserves, hybrid instruments and subordinated term debt. It is considered less secure than Tier 1, a bank’s other form of capital, because it is more difficult to liquidate. In the United States, the total capital requirement is based in part on the risk weighted assets of a bank.
