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UPDATE 1-Monte Paschi says offer to swap retail bondholders' shares delayed
October 29, 2017 / 6:24 PM / a month ago

UPDATE 1-Monte Paschi says offer to swap retail bondholders' shares delayed

(Recasts, adds context, details, Treasury source on timing)

MILAN, Oct 29 (Reuters) - A voluntary public offering to swap Banca Monte dei Paschi di Siena shares that former retail bondholders were given as part of a state bailout into senior debt has been delayed, the bank said on Sunday.

The Tuscan lender, the world’s oldest still in business, was kept afloat earlier this year thanks to a state rescue package totaling some 8 billion euros ($9.29 billion).

Under the plan, Monte dei Paschi issued new shares to all subordinated bondholders whose debt was converted into equity to meet European Union rules shielding taxpayers by imposing losses on investors in the event of a rescue.

The Treasury however committed to compensate retail bondholders who had bought the bank’s junior debt without being fully aware of the risks, pledging to spend 1.5 billion euros to buy their shares.

The bank said on Sunday the offer, which was expected to start on Monday Oct. 30 and run to Nov. 17, was delayed because the Treasury has yet to issue the relevant decree.

The new timeline for the offer would be made known once the decree has been issued, the bank said in a statement.

A Treasury source said on Sunday that the ministerial decree was being prepared and should be ready in a few days.

Weakened by mismanagement, a derivatives scandal and bad loans, Monte dei Paschi was at the centre of Italy’s banking crisis and its rescue removed the biggest threat to the country’s financial system.

The bank’s shares resumed trading on Wednesday after a 10-month hiatus. The stock closed at 4.736 euros on Friday. ($1 = 0.8615 euros) (Reporting by Agnieszka Flak and Stefano Bernabei; Editing by Adrian Croft)

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