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The debt swap is part of a 5 billion euro ($5.3 billion)rescue plan aimed at staving off the risk of being wound down.
Shares in the lender fell 4 percent on Monday hit by the prospect of a Dec. 4 referendum vote in Italy that may prompt Prime Minister Matteo Renzi to resign, ushering in a period of political instability that could scupper Monte dei Paschi's ambitious plan.
The yield on a subordinated bond due in September 2020 rose to 20.8 percent from 19.4 percent on Friday with traders mentioning sales by retail investors. The yield on May 2018 subordinated bond was little changed at 41 percent, based on Reuters data.