MILAN, Nov 18 (Reuters) - Bondholders of Italian bank Carige are likely to buy up all 60 million euros ($70.8 million) of shares reserved for them in a new issue, a source familiar with the matter said on Saturday.
Carige plans to launch on Nov. 22 a 560 million euro cash call needed to safeguard its future, after securing backing from core shareholders and underwriters.
The bulk of the cash call, up to 498 million euros, is reserved for the bank’s shareholders, while a small portion can be taken up by holders of its junior bonds — which have been converted into senior debt under an exchange offer that became mandatory.
The source said bondholders hit by the swap offer, which was carried out at a discount, were interested in converting part of their holdings into equity in the hope of eventually cutting their losses.
Bank Intesa Sanpaolo and insurers Assicurazioni Generali and Unipol are among holders of Carige’s debt who took up the swap offer.
The source also said a group of institutional investors who have committed to take on shares left unsubscribed in the offer included some who had existing relationships with the bank, and other non-speculative financial investors.
Another source familiar with the matter separately said one such investor is bad loan specialist Credito Fondiario, which has just entered exclusive talks with Carige to buy the bank’s debt servicing business and 1.2 billion euros in bad debts. The second source said Credito Fondiario was ready to invest 30 million euros to buy new shares.
$1 = 0.8480 euros Reporting by Valentina Za; Editing by Silvia Aloisi and Isla Binnie