Monte dei Paschi races to raise €5 bln to stay afloat

Embattled Italian lender Banca Monte dei Paschi di Siena SpA is making a last-ditch effort to raise 5 billion euros by the end of the year to stay afloat and avoid being bailed out by the Italian government. In a statement late Sunday, the bank said it will seek new private capital by reopening a debt-to-equity swap offer after receiving regulatory authorization, according to media reports. The bank last week made an offer to bondholders to swap €4.3 billion worth of subordinated into shares, but only raised €1 billion through the offering. The bank is racing to raise €5 billion by the end of the year after the European Central Bank rejected BMPS's request for more time to complete its recapitalization plan. Monte dei Paschi shares jumped 6.9% in early European trade on Monday.

Market Pulse Stories are Rapid-fire, short news bursts on stocks and markets as they move. Visit MarketWatch.com for more information on this news.