>>> Three banks opt out of Monte dei Paschi's proposed 5 bln euro cash call - source


  • 28-Jul-2016 18:05:57 - MORGAN STANLEY, UNICREDIT AND INTESA SANPAOLO REBUFF PROPOSAL TO GUARANTEE MONTE DEI PASCHI'S PROPOSED 5 BILLION EURO CASH CALL - SOURCE
  • 28-Jul-2016 18:05:58 - BANKING CONSORTIUM FOR CASH CALL EXPECTED TO INCLUDE MEDIOBANCA, JPMORGAN, CITIGROUP, BANK OF AMERICA, DEUTSCHE BANK AND CREDIT SUISSE, BUT MORE BANKS NEEDED - SOURCE

Three banks opt out of Monte dei Paschi's proposed 5 bln euro cash call - source - Reuters News

28-Jul-2016 18:08:16

By Pamela Barbaglia

LONDON, July 28 (Reuters) - Morgan Stanley MS.N and Italian lenders UniCredit CRDI.MI and Intesa SanPaolo ISP.MI have rebuffed a proposal by Italy's third-largest lender, Banca Monte dei Paschi di Siena BMPS.MI, to back its proposed 5 billion euro ($5.54 billion) cash call, a source familiar with the matter told Reuters.

The troubled lender is trying to pull together a banking consortium to guarantee its proposed capital increase in the next 24 hours so it has a plan in place by the time the results of the European bank stress tests are released on Friday evening. (Full Story)

Banking sources say the tests will show the bank has insufficient capital to withstand an economic downturn.

It has so far received interest from Citigroup C.N, Bank of America BAC.N, Deutsche Bank DBKGn.DE and Credit Suisse CSGN.S, the source said.

The consortium will also include Mediobanca MDBI.MI and JPMorgan JPM.N who are acting as global coordinators for the proposed capital hike, the source said.

Other banks including Societe Generale SOGN.PA, UBS UBSG.S and Nomura are currently being contacted in a bid to share the cost of the proposed transaction which is said to involve Monte dei Paschi issuing stock at between 0.5 and 0.6 percent of its tangible book value, the source said.

"As things stand now, the consortium is weak," the source said. "More banks need to come onboard."

Another source, who is close to the Tuscan lender, said Monte dei Paschi is expected to release the guidelines of its rescue plan on Friday and is confident of reaching a pre-agreement with a sufficient number of banks "in due time."

Monte dei Paschi, Mediobanca, JPMorgan, UniCredit and Intesa declined to comment. The other banks were not immediately available for comment.