Funding
The bank's funding requirements are met by issuing CDs and debt securities and medium/long-term loans, the latter usually granted by credit institutions. This enables us to maintain the desired composition of our funding resources in terms of both quality and quantity.
Our senior issue
- Traditional bonds
Debt securities whereby Mediobanca guarantees repayment of the capital invested and payment of interest accruing thereon, which may be at a fixed or floating rate. These are the simplest securities investors can buy in terms of predictable, regular income to bondholders. - Structured bonds
These are more complex than traditional bonds, in the sense that they also incorporate a derivative component, usually in the form of an option. Mediobanca guarantees repayment of capital invested, but the interest is calculated based on the derivative component, except for a guaranteed minimum. - Convertible bonds
These entitle shareholders to exchange their bonds into shares of a given company over a period of time and at an exchange ratio set when the bonds are issued. Such rights have no paper equivalent and so cannot be traded separately from the bonds themselves. - Bonds with warrants
These bonds entitle their holders to buy shares in a given company or other securities or goods produced by that company at a predetermined price. The warrants can normally be traded separately from the bonds immediately after they are issued. - Reverse convertibles bonds
Here a traditional debt instrument is combined with a put option over a predetermined quantity of a financial underlying asset, which the issuer may exercise at maturity at a predetermined price. If the underlying asset performs poorly, amounts repaid at maturity may be lower than those initially subscribed for, and for this reason reverse convertibles cannot legally be classified as debt securities.
Our subordinated notes
Subordinated Notes constitute direct, unsecured and subordinated obligations of Mediobanca. In the event of a winding up, dissolution, liquidation or bankruptcy of Mediobanca, the payment obligations of Mediobanca in respect of principal and interest under Subordinated Notes and any related Coupons will rank in right of payment (A) after unsubordinated creditors (including depositors and any holder of Senior Notes) of Mediobanca (B) but at least pari passu with all other subordinated obligations of Mediobanca which do not rank or are not expressed by their terms to rank junior or senior to such Series of Subordinated Notes and (C) in priority to the claims of shareholders of Mediobanca. Lower Tier II Subordinated Notes and Tier III Subordinated Notes rank pari passu amongst themselves and rank senior to Upper Tier II Subordinated Notes.
Documentation prepared upon the occasion of the issue of the securities listed within the various types of investment referred to above is made available here; however, it should be noted that only the documents lodged with the relevant authorities are valid, all of which are available at our head office in Piazzetta Cuccia 1, Milan.