€2.50BN Banca Monte dei Paschi di Siena rights issue

Mediobanca acted as Joint Global Coordinator in the Rights Issue of Banca Monte dei Paschi di Siena – the 2nd largest capital increase of 2022 in Europe

The Rights Issue is a landmark transaction in the European ECM space with a total amount raised of €2.5bn. Hence, this is i) the 2nd biggest Rights Issue priced in 2022 in Europe ii) the 3rd ECM transaction of the year by size and iii) the 8th largest since 2021. The transaction alone represents 48% of the total rights issue volumes and almost 10% of total European ECM volumes in 2H 2022.

See below a brief description of the €2.50bn rights issue successfully completed by Banca Monte dei Paschi di Siena with a c.96.3% take-up at the end of the rights auction:

  • On June 23, 2022, Banca Monte dei Paschi di Siena (“BMPS”) announced its 2022-2026 business plan and the intention to launch a capital increase for €2.5bn to finance the execution of the BP and of its three pillars:
    • Achieve business model sustainability: i) efficient and simplified organisation ii) change in business mix driven by commercial revenues iii) digitalisation to improve commercial capabilities and efficiency
    • Build a solid and resilient balance sheet: i) sustained improvement in risk profile ii) funding sustainability iii) CET1 Ratio Buffer
    • Tackle the legacy issues: determined and clear data driven approach in managing extraordinary legal claims.
  • Ministero dell’Economia e delle Finanze (“MEF”), the reference shareholder, committed to subscribe the rights issue for its ownership portion (c.64%)
  • Mediobanca played a leading and key role throughout the capital increase process having extensively supported BMPS since the preparatory phase, acting as Joint Global Coordinator and entering into a pre-underwriting agreement in June 2022 
  • To limit the risk exposure and to guarantee a proper execution of the deal, the banks syndicate has signed several first allocation Sub-Underwriting Agreements with key financial and strategic investors, for a total amount of €500m
  • The transaction has been executed in a complex market environment, driven by uncertainty due to rate hikes to fight inflation, Ukraine conflict and Italian political situation (FTSE MIB -16.6% YTD, Stoxx 600 Banks -10.6% YTD, Spread BTP-Bund at the maximum values since 2020) – and with a limited discount to TERP applicable 
  • The final take-up figure of 96.3% – including sub-uw – testifies the positive outcome of the capital increase and the residual nature of the banks' underwriting commitment
  • Key terms of the rights issue:
    • Size: €2.50bn fully underwritten rights issue
    • N. of ordinary shares: 1,249,665,648 
    • Issue price: €2.00
    • Subscription ratio: 374 new shares for each 3 existing share
    • Discount to TERP: 7.79% vs 11 October closing price.
  •      Timetable:
    • Trading rights period: 17 – 25 October
    • Subscription period: 17– 31 October
    • Auction of unsubscribed rights: 1 – 2 November
    • End of subscription period post-auction: 3 November.

Mediobanca, acting as Joint Global Coordinator, has confirmed its strong relationship with BMPS as the result of a trusted and longstanding collaboration, having successfully supported BMPS in the vast majority of strategic transactions occurred over the last decade (including the 2011, 2014 and 2015 capital increases, the €4.9bn re-IPO in 2017 and the €8.1bn precautionary recapitalization in 2017).
Moreover, this transaction further strengthens our relationship with MEF and highlights Mediobanca's strong capabilities to support and work alongside public institutions.

The successful outcome of BMPS rights issue has proven once again our unparalleled track record on ECM transactions and our strong FIG expertise. The joint effort of FIG, ECM and FSO teams provided matchless and acknowledged value-added in such a complex deal, supporting the execution of a flowless settlement, and decisively contributing to the success of the deal.

With the €9.4bn Porsche jumbo IPO and BMPS capital increase, Mediobanca is confirmed among the most active European Equity Houses in 2022.
 

Mediobanca Group