Monte dei Paschi

Fitch placed Banca Monte dei Paschi di Siena (MPS) on negative watch on Monday evening, following Moody’s, which postponed its ratings upgrade decision last week, with the Italian bank now expected to face a capital shortfall of up to €1.5bn by the end of next year.

Moody’s postponed its decision on whether to upgrade Banca Monte dei Paschi di Siena (MPS) on Thursday, as the ratings agency wants to examine the Italian bank’s forthcoming capital plan first.

Banca Monte dei Paschi di Siena led a trio of speculative grade Italian banks into the euro bond market this week, as credit investors showed that no issuers were off limit in their increasingly desperate search for yield. Tyler Davies reports.

Sub-investment grade Italian lenders Banco BPM and Illimity Bank were well-supported in the euro bond market on Thursday, as investors showed they were more than happy to look at riskier names in their search for yield.

Banca Monte dei Paschi di Siena found plenty of demand for a new senior bond in the euro market on Tuesday, aided by growing speculation about the possibility of a merger with UniCredit.

National Bank of Greece (NBG) has become the lowest rated bank to issue green debt, after winning two times as much demand as it needed for a €500m senior bond on Thursday. The trade formed part of a flurry of green issuance in the FIG market, alongside new deals from Banque Fédérative du Crédit Mutuel and Mizuho Financial Group.

National Bank of Greece (NBG) is set to become the first Greek financial institution to issue a green bond, after announcing plans for a new green senior deal on Wednesday.

Banco BPM struggled to build much of an order book behind a new tier two bond this week, with bankers arguing that investors have become more selective with their exposures to southern European names.

A new tier two deal from Italian lender Monte dei Paschi di Siena on Thursday showed that the market is open for trickier credits looking to sell riskier bonds. The deal emerged as the European Central Bank told Monte to raise capital to complete the sale of €8bn of non-performing exposures to Amco, the state-owned asset management company.

Analysts think Intesa Sanpaolo will succeed in winning over UBI Banca’s shareholders after sweetening the terms of its takeover bid. The merger deal is seen as an important test case for consolidation in the Italian banking sector.

The European Banking Authority is urging resolution planners to consider the real impact of Covid-19 on banks. It wants to make sure that resolution can be seen as a "credible" option in times of stress.

BPER Banca said on Monday that it would buy more loans and branches than expected as part of its involvement in a potential tie-up between Intesa Sanpaolo and UBI Banca. The merger process hit a snag last week, but market participants hope that a deal can still be agreed.