Bonds sold by Banca Popolare di Vicenza SCpA fell after its underwriter UniCredit SpA said it may delay an initial public offering aimed at ensuring the Italian lender’s survival.
Pop. Vicenza’s 200 million euros ($228 million) of subordinated notes due in September 2025 dropped 7 cents on the euro to 63 cents, according to data compiled by Bloomberg.
“The bank needs capital badly, so a delay isn’t good,” said Marco Troiano, financial institutions director at Scope Ratings in London. “Junior bondholders may be worrying that they’re on the hook.”
UniCredit said it’s reviewing timing of the IPO, which would raise as much as 1.8 billion euros and help Pop. Vicenza transform into a joint-stock firm from a cooperative lender. The European Central Bank, which has asked the lender to implement the plan by April 30, warned that without a capital increase it faces resolution, imposing losses on creditors.
“UniCredit is assessing whether the conditions exist to carry out the operation in the set timeframe,” the bank said late Wednesday in an e-mailed statement. As sole guarantor of the IPO, UniCredit may be left holding any shares not taken up by the market.
Attempts to recapitalize banks including Pop. Vicenza, Veneto Banca SpA and Banca Carige SpA come amid a shake-up in Italy’s banking sector, which is weighed down by an estimated 360 billion euros of troubled and defaulted loans.
Banco Popolare SC last week agreed to buy Banca Popolare di Milano Scarl in a deal that will create Italy’s third-largest lender, while Banca Carige received a 500 million-euro offer from U.S. investment firm Apollo Management International LLP to buy shares, in addition to a proposal to purchase an unspecified amount of bad loans.
Veneto Banca’s 200 million euros of junior notes fell 3 cents on the euro to 66 cents. Intesa SanPaolo SpA, through which Veneto is due to raise capital, “doesn’t see any problem” with the stock sale, Chief Executive Officer Carlo Messina told reporters on Wednesday.