Carige's Board of Directors approved the conditions of the Lme operation – which will start today – for the conversion of subordinated bonds into senior ones. The transaction, according to a note from the Bank, provides for an exchange offer and a consent solicitation for the purpose of replacing subordinated notes (for a total amount of 510 million) with newly issued senior notes under its Emtn program with issue price equal to 100%, duration 5 years, annual fixed rate coupon equal to 5%.
To the exchange price - which provides for prices equal to 30% for Tier 1 securities and 70% for Tier 2 securities - the accrual of interest accrued on the same since the last ex-dividend date must be added, only for Tier 2 subordinated securities. of the coupon up to the relevant settlement date of the bond conversion operation, which in any case remains subject to the successful outcome of the capital increase.
As part of the exercise of the delegation of the capital increase, the BoD may reserve a tranche, for an amount up to a maximum of 60 million, possibly to one or more categories of holders of subordinated securities covered by the Lme.
The bond conversion operation, continues the note, “is part of the overall capital strengthening maneuver which is based on three essential elements: Lme operation, capital increase, asset sale. The success of each of the envisaged transactions is essential for the achievement of the objectives of the 2017-2020 strategic plan, while the non-execution of the transaction within the terms indicated could have significant negative effects on the overall economic, equity and financial situation of the Bank".
In order to assess the financial adequacy of the transaction, Carige made use of the assistance of Kpmg advisory as financial advisor.
Yesterday the shareholders' meeting of Banca Carige had given the green light for the capital increase of 560 million euros proposed to the board.
