Italy

Banca Popolare di Bari is poised to sell the riskier bonds in its landmark bad loan securitisation without the help of Italy's rescue fund, having turned to a US hedge fund instead, according to people familiar with the situation, Reuters reported. The Italian lender has lined up Davidson Kempner Capital Management for both the mezzanine and junior notes in the Popolare di Bari NPLs 2016 securitisation, three people with knowledge of the matter said. The 14m mezzanine chunk is rated B(High)/B2, while the 10m junior slice is unrated.

Banca Monte dei Paschi di Siena may have got the green light for an ambitious recapitalisation, but the bank is yet to convince investors to buy into the complex plan needed to keep the troubled lender afloat, Reuters reported. Shareholders in Italy's third largest lender last week approved a 5bn recapitalisation aimed at keeping the bank from being wound down. BMPS is set to launch on Monday a debt-to-equity conversion offer that seeks to reduce the size of a proposed share sale.

Up to eight of Italy’s troubled banks risk failing if prime minister Matteo Renzi loses a constitutional referendum next weekend and ensuing market turbulence deters investors from recapitalising them, officials and senior bankers say, the Irish Times reported. Mr Renzi, who says he will quit if he loses the referendum, had championed a market solution to solve the problems of Italy’s €4 trillion banking system and avoid a vote-losing “resolution” of Italian banks under new EU rules.

Hedge funds investors holding some of Banca Monte dei Paschi di Siena's riskiest bonds said they would take part in the bank's proposed tender but the trade is still riddled with execution risk with Tier 2 holders' participation in the balance, Reuters reported. The Italian lender announced late on Monday that it was looking to target up to 5.3bn of subordinated debt in a debt-for-equity swap aimed at getting the bank back on its feet .

Ailing Italian lender Monte dei Paschi di Sienaon Monday announced the terms of a planned debt-to-equity conversion, a key plank of a rescue scheme aimed at averting the bank being wound down, Reuters reported. The bank said the voluntary debt swap offer would target 4.289 billion euros (3.68 billion pounds) of subordinated bonds. It was also considering converting a hybrid financial instrument known as Fresh 2008 worth 1 billion euros.

Shares in Monte dei Paschi di Siena fell 6 per cent in early trading on Wednesday, triggering an automatic trading suspension, after the withdrawal of an alternative rescue plan for Italy’s third largest lender, the Irish Times reported on a Reuters story. Veteran Italian banker and former industry minister Corrado Passera withdrew his plan for Monte dei Paschi on Tuesday, accusing the bank of obstruction and ignoring the interests of its own shareholders.

Banca Monte dei Paschi di Siena unveiled an ambitious turnaround plan last week, but its recast recapitalisation still hinges on a 28bn bad loan securitisation that remains marred by deep uncertainty, Reuters reported. Italy's third largest lender confirmed that its financial overhaul now includes a potential liability management exercise that will look to assign both retail and institutional subordinated bondholders new equity following scant investor interest for the 5bn cash call proposed in July.

The European Commission chiding member states for missing their fiscal targets has become a familiar part of the EU policy apparatus, together with its failure to follow through with sanctions when miscreant governments fail to comply, the Financial Times reported. The process of disapproval without consequences is in train once again in Italy, a country with more than its fair share of fiscal problems down the decades.

Banca Monte dei Paschi di Siena, the beleaguered Italian lender, said on Tuesday that it would slash jobs, close branches and sell some businesses as it seeks to convince investors to back its plan to raise new capital, the International New York Times reported. The latest turnaround plan, unveiled by the new chief executive, Marco Morelli, comes at a critical time for the bank, which was the worst performer in stress tests conducted this year by the European Banking Authority, which regulates lenders in the European Union.

Tension between Brussels and Italy over the country’s 2017 budget escalated on Tuesday after the European Commission imposed a 48-hour deadline on Rome to explain why it was breaking previous fiscal agreements, the Financial Times reported. Matteo Renzi, Italy’s prime minister, in effect, dared the commission last week to challenge him over a budget proposal that scraps the deficit reduction targets to which the country had committed itself this year.