The board of directors of Monte dei Paschi di Siena (the “Bank”) authorised the issue of governmental financial instruments (the “Financial Instruments”) pursuant to articles 23-sexies and ff. of Decree n. 95 of 6 July 2012, converted with amendments by Law n. 135 of 7 August 2012, eligible for inclusion in the regulatory capital Core Tier 1 (in compliance with EBA Recommendation of 8 December 2011) for an overall maximum amount of EUR 3,9 billion. EUR 1,9 billion of such amount will be used - subject to Bank of Italy authorisation - to redeem and entirely substitute the financial instruments issued pursuant to article 12 of Decree n. 185 of 29 November 2008, converted by Law n. 2 of 28 January 2009 (the so-called “Tremonti Bonds”).
The issue of Financial Instruments will be carried out, subject to the granting of required authorisations, within 28 December 2012, with issue price at par. The individual nominal value of the Financial Instruments will be equal to EUR 1 million.
It should be noted that the required overall amount of the Financial Instruments, fixed in EUR 3,9 billion, represents the maximum within the range originally determined by the Bank of Italy.
The EUR 500 million increase of the overall amount previously announced by the Bank is due to the possible impacts on capital arising from the results of the ongoing analysis of certain structured transactions carried out in previous financial years. Considering the negative profitability of such transactions, currently included in the portfolio of financial assets whose underlying are sovereign bonds, the Bank will re-negotiate their funding structure to the end of improving their profitability.
The priority for the Group is returning to adequate and sustainable profitability levels by following, also through extraordinary discontinuity actions, the trail blazed in the business plan 2012-2015.
The board of directors of Banca Monte dei Paschi di Siena S.p.A. mandated the Chief Executive Officer and the President to submit the subscription request of the Financial Instruments to the Ministry of Economics and Finance and to the Bank of Italy.