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Monte dei Paschi opens debt swap offer to retail investors

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Banca Monte dei Paschi di Siena has opened its offer for a debt to equity conversion, a major part of a privately-funded rescue of the troubled bank, to retail investors.

[MILAN] Banca Monte dei Paschi di Siena has opened its offer for a debt to equity conversion, a major part of a privately-funded rescue of the troubled bank, to retail investors.

Italy's third biggest bank has until the end of the year to raise 5 billion euros (US$5.22 billion) in equity or face being wound down by the European Central Bank, potentially triggering a wider banking and political crisis in Italy.

Sources said, if needed, the government is ready to step in with state money to keep the Siena-based bank afloat.

Monte dei Paschi said on Friday its latest debt-to-equity offer would run from Dec 16 to Dec 21.

sentifi.com

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The bank, which wants retail investors to convert their junior bond holdings into shares, said market watchdog Consob had approved the reworked offer on Thursday.

On Thursday the bank said it would extend its debt-swap offer to include investors who hold 1 billion euros in hybrid securities known as "Fresh 2008".

It also wants retail investors to convert their subordinated bondholdings, totalling 2.1 billion euros, into shares.

Besides a debt conversion offer, the ailing bank is looking for investors to take up new shares.

A source close to the matter said on Thursday Qatar's sovereign wealth fund, which bankers have said could invest 1 billion euros in the bank, had yet to make up its mind.

REUTERS

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