HALISTER1: Italy Bank Rescue Fund Not Panacea But Avoids Bail-In: Fidelity

Italy Bank Rescue Fund Not Panacea But Avoids Bail-In: Fidelity

(Bloomberg) -- Creation of EU5b fund to offload bad loans in Italy shows willingness to avoid bail-ins of bondholders but it mainly addresses the problem of the country’s smaller banks, Dierk Brandenburg, sovereign analyst at Fidelity International, says in e-mailed comments.
  • Larger players, such as Monte Paschi, remain a concern for investors that will yet have to be addressed
  • Don’t expect Italian assets to rally materially on the back of the news
  • That said, it’s positive to see Italy making progress in bank restructuring
  • Provision of private-sector money from a broad set of domestic players signals that industry is committed to make progress
  • NOTE: Italy Bank Rescue Fund May Not Erase Market Skepticism: Analysts
  • NOTE: Fidelity’s Luxembourg-based Euro Bond Fund holds BTPs due from 2019 to 2044, with the biggest exposure to 2024 maturity, Bloomberg data show
  • NOTE: Fidelity AUM at $258.4B as Sept. 30, according to website
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

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Dierk Brandenburg (Fidelity Investment Management Ltd)

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