MILAN, April 5 Senior debt issued by Popolare di
Vicenza and Veneto Banca extended gains on Tuesday after the two
ailing Italian banks said the European Central Bank had
confirmed they met criteria for a state bailout.
Investors had dumped the two banks' debt last week on
concerns they may fail to qualify for a state rescue and would
have to be wound down under European Union rules that impose
losses on senior bondholders and large depositors.
Under the precautionary recapitalisation scheme that Italy
has asked to be allowed to use to pump money into the two banks
only shareholders and junior bondholders will take a hit.
By 0957 GMT an October 2018 bond issued by Popolare di
Vicenza yielded 12.4 percent, down from 19.4
percent late on Tuesday and 25 percent on Monday.
(Reporting by Giulio Piovaccari, writing by Valentina Za,)