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2016-11-20 — wolfstreet.com
``Investors are worried about two things: the very real prospect of a government defeat in the upcoming referendum on constitutional reforms and Italy's blossoming banking crisis... JP Morgan Chase's last-ditch rescue of Monte dei Paschi continues to flounder, as shareholders who have already lost €8 billion in two previous capital expansions seem strangely reluctant to provide the bank with another €5 billion in fresh capital. That has left MPS and its handsomely compensated rescuers little choice but to unveil Plan Y this week, which essentially involves offering holders of the bank's subordinate bonds a debt-for-equity swap.
... Now some of [the] retail investors [who own about half of the subordinated debt to be swapped], many of whom are traditional voters of Matteo Renzi's centre-left party, are on the verge of being bailed in. It's Renzi's worst nightmare, at the worst possible time: the swap scheduled to take place on Nov 28, just 6 days before referendum day.
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