The bullet is through the church, or so it is (literally) said in the Netherlands: the nationalization of SNS Reaal, which was expected, is now a fact. The first interesting development is that the Dutch budget deficit increases to 3,3% or in other words: over the limit set by the EU. But Finance minister Jeroen Dijsselbloem says this nationalization was inevitable, because the bank would have gone bankrupt otherwise, and very soon too.
Regarding the junior/subordinate bonds:
Het ministerie van Financiën onteigent de investeerders die achtergestelde leningen hebben gegeven aan SNS Reaal. Dat scheelt de schatkist volgens Dijsselbloem een miljard euro. De Nederlandse banken moeten ook bijdragen aan de overname.
In other words – the Finance ministry disowns the investors that had subordinate loans to SNS Reaal, which apparently makes a difference of 1 billion (shareholders are also not protected). Also the other Dutch banks are supposed to contribute to the nationalization – they have to pay banking fee of 1 billion. But in exchange, they can take more time to fill a fund that is meant to protect the accounts of normal account holders.
I am not sure if this write-down of subordinate bonds is the issue referred to by Fitch, but the whole episode is quite dramatic, especially since the bank received support in 2008 already, and the Dutch financial system doesn’t yet seem any more stable.