Nationalization Likely For Monte Paschi

Banca Monte dei Paschi di Siena SpA will probably fail to lure sufficient demand for a 5 billion-euro ($5.2 billion) capital increase, leading to what would be the country’s biggest bank nationalization in decades, said people with knowledge of the matter.

No anchor investor has shown interest in the stock sale, the Siena-based company said in a statement late Wednesday. Two debt-for-equity swap offers will raise about 2 billion euros, with investors converting bonds for about 2.5 billion euros, the lender said. The interest is probably insufficient to pull the deal off, said the people, who asked not to be identified before a final assessment.

Qatar’s sovereign-wealth fund, which had considered an investment, hasn’t committed to buying shares, people with knowledge of the matter have said. Other institutions that were considering buying shares have indicated that they would put funds in the troubled bank only if it’s able to raise 1 billion euros from cornerstone investors, according to the people.

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Craig Erlam

Craig Erlam

Senior Market Analyst, UK & EMEA at OANDA
Based in London, Craig Erlam joined OANDA in 2015 as a market analyst. With many years of experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while producing macroeconomic commentary. His views have been published in the Financial Times, Reuters, The Telegraph and the International Business Times, and he also appears as a regular guest commentator on the BBC, Bloomberg TV, FOX Business and SKY News. Craig holds a full membership to the Society of Technical Analysts and is recognised as a Certified Financial Technician by the International Federation of Technical Analysts.
Craig Erlam
Craig Erlam

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