There is no peace for the Monte dei Paschi. This time the problems come from Luxembourg, where the holders of the Fresh 2008 bond have filed a complaint with the competent Court in order to challenge the inclusion of the bond in the burden sharing. The latter in fact involved the forced conversion of the bonds in their possession into shares as part of the precautionary recapitalization operation carried out by Rocca Salimbeni with the approval of the EU Commission.
The stock exchange does not seem concerned by this initiative at the moment and the Mps title, after several sessions in the red, it is currently up 8,7% to 3,638 euros.
In a note, the representatives of the bondholders "acknowledge that in the publication of the MPS prospectus dated 24 October 2017, certain contracts relating to the Fresh 2008 were declared canceled by law and that the Fresh 2008 is to be converted on a contractual basis due to capital gaps".
In response to this, “representatives of the bondholders have filed a complaint with the competent court in Luxembourg against MPS and other involved parties to establish that such unilateral statements by MPS have no legal basis and that contracts relating to Fresh 2008 should remain valid”.
In the event that their requests are not listened to, and therefore the bond is no longer considered valid, they will ask damages of 1 billion euros.
Il Financial Times further explains that "the holders of the Bond Fresh 2008 have also initiated legal action against Mitsubishi, issuer of the bond, and JP Morgan which acted as arranger of the issue", adding that investors intend also mention the EU Commission which gave the go-ahead for the forced conversion of the Fresh 2008 bond into new MPS shares.
We recall that the Government has allocated 5,4 billion euros for the recapitalization of Monte dei Paschi, becoming its first shareholder.
