Credit investors, whether in cash or synthetics, often welcome corporate restructurings by distressed firms. Job cuts, rationalisation of operations and, in particular, asset sales are usually regarded as bondholder friendly actions.

But this 'wasnt the reaction when Banca Monte dei Paschi di Siena (MPS) announced plans to restructure its ailing business. The Italian bank said that it would reduce jobs by 2,500 – cutting 10% of its staff costs - and close 500 of its 2,000 branches over the next three years. MPS also declared that it would sell its payments processing unit for €520 million...