LONDON: Morgan Stanley and Italian lenders UniCredit and Intesa SanPaolo have rebuffed a proposal by Italy's third-largest lender, Banca Monte dei Paschi di Siena, 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.
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, Bank of America, Deutsche Bank and Credit Suisse , the source said.
The consortium will also include Mediobanca and JPMorgan who are acting as global coordinators for the proposed capital hike, the source said.
Other banks including Societe Generale, UBS 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.
Comments
Comments are closed.