Monte Paschi Taps Bondholders for Swap as Rescue Deadline Nears
- Debt-for-equity swap is part of lender’s recapitalization plan
- Bank offering up to 100% of face value for the junior debt
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Banca Monte dei Paschi di Siena SpA is offering stock to holders of 4.3 billion euros ($4.6 billion) of bonds, a key piece in the plan to raise funds from investors and turn around the ailing Italian lender.
The world’s oldest bank will give equity up to 100 percent of face value for the subordinated bonds, according to a statement late on Monday. Monte Paschi’s 369 million euros of notes due April 2020 -- which are included in the plan -- rose to as high as 81 cents on the euro on Tuesday before paring to 73 cents at 10:10 a.m. in London, according to data compiled by Bloomberg.