The headquarters of UniCredit bank is seen in downtown Milan, Italy, February 8, 2016. REUTERS/Stefano Rellandini MILAN (Reuters) - Italian bank UniCredit (CRDI.MI) looks set to go ahead with its deal to underwrite almost all of a 1.76 billion euro ($2 billion) share issue by smaller rival Popolare di Vicenza, two sources said, amid market concerns about a possible delay. UniCredit said last week it was assessing whether the conditions were in place to carry out Popolare di Vicenza’s capital raising according to schedule. UniCredit agreed in September to be sole guarantor for up to 1.5 billion euros of Popolare di Vicenza’s capital raising, but Italian banking shares soon took a tumble. Italy’s banking sector has fallen almost 40 percent so far this year. Popolare di Vicenza will raise the funds by listing its shares on the stock market. UniCredit is set to discuss Popolare di Vicenza’s capital raising at a board meeting on Thursday. Barring any surprises at the meeting, the transaction will proceed according to schedule, one source familiar with the matter said on Wednesday. Another source said UniCredit was standing by its commitment because the terms of the underwriting contract were strict. Popolare di Vicenza aims to complete its capital raising and listing by the end of April to meet capital-adequacy requirements of the European Central Bank. UniCredit has extended its guarantee contract by roughly 10 days, sources said. Additional reporting by Valentina Za; Editing by Mark Bendeich
Following our note earlier this week warning of creditors concerns that UniCredit may be forced to purchase Popolare di Vicenza's shares if it fails to find buyers, thereby affecting its own regulatory capital levels, the Italian lender has now confirmed it is to stand by its commitment and looks set to go ahead with its deal to underwrite almost all of a $1.76 billion euro share issue by Popolare di Vicenza amid market concerns of a possible delay.