Italy's Carige issues 2bn euros in state-backed bonds

MILAN: Italy's Carige said on Friday it had issued 2 billion euros ($2.3 billion) in state-guaranteed debt after the Rome government approved the emergency liquidity measure earlier this month to prop up the ailing bank.

Italy rushed to set up a 1.3 billion euro fund to support Carige after the European Central Bank put the bank under temporary administration on Jan. 2 following a failed attempt to raise new capital from investors.

Carige said it had issued two bonds worth 1 billion euros each. A spokesman for the bank declined to say whether they had been underwritten by Carige itself or placed with investors.

Banks can buy bonds they have issued with a guarantee from the state and use them as collateral to borrow from the ECB. They could also place them with investors, paying a premium over government bonds.

Carige said one bond matures on Jan. 25, 2020 and carried a 0.50 percent coupon. The second one has a July 26, 2020 maturity and a 0.75 percent coupon.