Unicredit about to sell NPLs for 3 billion

29 January, Il Messaggero

Unicredit continues with the clean-up of its accounts, as the company aims at disposing of bad loans for 3 billion euro.

Since the third quarter of 2016, UniCredit has worked on reducing its NPL portfolio by over 36 billion (according to the figures for the third quarter of 2018), and it’s committed to “reset the non-core portfolio by 2021”. The ratio between bad loans and the total non-core credits was set at 4.3% in the third quarter of 2018, aligned with the average of the EBA sample.

According to the rumours, in February, the bank will start working on a new portfolio for 800 million, while the remaining tranche will be disposed in the following months. The project has been named Sandokan 2, following a similar operation carried out at the end of 2015, although for a lower amount.

Source: Il Messaggero

Translator: Cristina Ambrosi


Large UTP operations coming up for Intesa Sanpaolo and Unicredit

29 January, Finanza Report

Intesa Sanpaolo and Unicredit are ready to announce new operations, especially for what concerns UTPs.

According to Bloomberg, Intesa Sanpaolo is currently working at the sale of an impaired loan portfolio amounting to 15.6 billion euro. The portfolio is composed of UTPs with underlying real estate and corporate loans. The total amount of credits hasn’t been defined yet, but the operation will likely consist in one single portfolio for a nominal value of approximately 2 billion euro.

The operation is included in the NPL reduction strategy of the bank, aiming at reducing the stock from 9.2% to 6% by 2021. The operation seems to be aligned to Messina’s intention of accelerating the disposal process for this is a priority for the bank.

As the banker commented yesterday: “we’ve done a lot concerning NPLs, and now we’ve returned to the levels before the recession. But we want to do more”. The Ceo also expressed the possibility of a further reduction of impaired loans in the upcoming months.

Unicredit might follow the same path. According to Milano Finanza, the bank might be ready to launch its new project Sandokan 2 for the disposal of impaired loans for 3 billion. The credits mostly consist in unlikely to pay backed by real estate.

A first tranche for 800 million might be sold already in February with the participation of players which are already familiar with Unicredit. Pimco, Gwm and Aurora Recovery Capital, in fact, have already worked in the Sandokan operation in 2015.

Meanwhile, on the Milan Stock Exchange, the two banks reported negative performances: -0.07% for Intesa Sanpaolo and -0.86 for Intesa Sanpaolo.

Source: Finanza Report

Translator: Cristina Ambrosi

Intesa Sanpaolo working on the transfer of a large NPL portfolio

28 January, Finanza Online

In the first session of the week, the Intesa Sanpaolo stocks reported a negative performance losing almost 1% on Piazza Affari and dropping at 2.045 euro. According to Bloomberg, the bank is currently working at the transfer of a bad loan portfolio for a nominal value of about 2 billion euro, although the precise amount of NPLs hasn’t been set yet. The operation might also include UTPs (unlikely to pay).

Last week in Davos, Ceo Carlo Messina expressed the intention of accelerating with the targets on the business plan. With the presentation of the quarterly results approaching, the bank might make another similar statement. The plan implies the reduction of the NPL stock to 6% by 2021 from the 9.2% reported at the end of the third quarter of 2018.

Source: Finanza Online

Translator: Cristina Ambrosi

Illimity: “We’ll consider Carige bad loans if they’re on the market”

29 January, The Meditelegraph

“If Carige puts on the market its UTPs and NPLs, we’ll look into that”, stated the Illimity Ceo Corrado Passera while commenting the potential interest of the bank for a possible Carige bad bank.

Concerning at the Illimity NPL target for 2019, Passera replies that “in February, we’ll present and update the business plan according to the merger” of Spax with Banca Interprovinciale, resulting in the creation of Illimity.

Source: The Meditelegraph

Translator: Cristina Ambrosi


Excellent performance of office leasing in Milan

30 January, Linkedin

2018 was an excellent year for office leasing in Milan with 390 thousand Sq m of office space transacted, reporting the best performance ever. The analysis carried out by the BNP Paribas Real Estate research centre guided by Cristiana Zanzottera showed a 10% take-up growth from 2017 and a 35% increase in comparison with the average of the last ten years.

The past year was a dynamic year also concerning the number of transactions, having increased to 300 from the 250 registered in 2017. The CBD Duomo prime lease grew by approximately 7% in the past year.

Source: Linkedin

Translator: Cristina Ambrosi

Banca Mps ready to put on the market real estate assets for 600 million

30 January, Monitor Immobiliare

Banca Mps is to put on the market real estate assets amounting to approximately 600 million euro in total by the end of February. The news confirms the rumours indicating Duff&Phelps Reag as the advisor chosen by the bank for the sale of the assets.

According to the rumours, there are about 90 properties in Milan, Padua, Florence, Siena and Rome, including the offices located in Via Santa Margherita in Milan and in Via del Corso in Rome. The portfolio also includes some historical buildings as well as former bank branches.

The headquarters in Siena, Rocca Salimbeni, will not be sold. The sales of real estate assets for an amount of 500 million euro is included in the de-risking plan till 2021 as agreed with the EU Commission during the bailout that saw the entrance of the Ministry of Finance with a 68% share.

Source: Monitor Immobiliare

Translator: Cristina Ambrosi

Illimity is interested in Condotte

30 January, Milano Finanza

Illimity intends taking part at the restructuring of Condotte. Ceo Corrado Passera commented: “We’ve clearly expressed our interest”, although he didn’t mention the terms and the dimensions of the operation. Among the other participants, there are also Oxy Capital and Highbridge. It’s still not clear whether the offer to the Rome-based construction company has been already formalised. Condotte has been under compulsory administrative liquidation for one year. Passera just added: “We’ve been in touch with the commissioners, and we expressed our commitment”. The former Minister of the Economy made understood that the interest of Illimity is limited to a part of the assets of the third Italian construction company with over 3,000 employees. The former banker observed: “construction is a crucial sector for the Italian economy and it’s going through a very difficult phase right now. We see Condotte as an asset to re-organise, relaunch and use as a model for the rest of the sector. As a bank specialising in impaired loans, we have to take part”.

Besides, the loan bridge for 190 million euro got the green light from the European Commission last December, but the negotiations with banks regarding their credits are not over yet.

Source: Milano Finanza

Translator: Cristina Ambrosi

Silvio Berlusconi bids farewell to real estate

26 January, Il Sole 24 Ore

Silvio Berlusconi’s career started in real estate: Milano 2 launched the young developer from Milan before becoming a TV tycoon and then Prime Minister. Yesterday in the headquarters in Via Paleocapa, Milan, the last investment was completed. Fininvest, in fact, sold the project Milano 4. With this last investment, the company has exited real estate. In the past few months, the company had already sold several properties such as the Odeon movie theatre in Milan city centre and another cinema in Rome.

The holding signed a preliminary agreement with the fund Orion Capital which is specialised in real estate operations. The fund bought a surface for 70 thousand Sq m for the construction of 700 apartments. Fininvest was assisted in the operation by Vitale & Co and by the legal firm Chiomenti. For the company, this transaction offers a double advantage, as the paid price of 20 million which will be paid at the closing, scheduled in June, also includes an earn-out clause that might bring the profits up to 60 million. In this way, Ceo Danilo Pellegrino will be able to distribute dividends in 2019. But more importantly, Fininvest got rid of some considerable investments in order to focus on its core business. Milano 4, which is actually the completion of Milano 3 in Basiglio (including 3,700 apartments, the Humanitas clinic of the Rotelli family, and a golf course), will have to be started from scratches and requires investments for 200-250 million euro.

From a technical point of view, the transaction concerned the sale of the company Immobiliare Leonardo (which holds the land in Basiglio) by Fininvest Real Estate. Immobiliare Leonardo represents the real estate division of the holding, namely the former Gestione & Servizi which got all the real estate assets, including some villas held by Idra and Dolcedrago. At first, Milano 4 appeared to be a return of Berlusconi to real estate, where he started in the Seventies with Edilnord. In 2017, Fininvest RE acquired 48% of Immobiliare Leonardo from Paolo Berlusconi, who was the sole owner. At the end of 2018, Silvio Berlusconi bought the remaining quotas and then sold the portfolio to Orion, legally assisted by Dentons. For Fininvest, this is another step towards the strategic re-organisation of the group which was started some time ago by Marina Berlusconi.

Source: Il Sole 24 Ore

Translator: Cristina Ambrosi

Partnership between Dea Capital Real Estate Sgr and Barents

26 January, Milano Finanza

Dea Capital Real Estate Sgr (De Agostini group) and Barents Re (an independent private reassurance group) have started a strategic partnership to provide innovative solutions for the management of funds’ real estate portfolios. Dea Capital Real Estate Sgr is the leading company in the real estate funds sector in Italy with 45 funds (two of which are listed) and managed assets amounting approximately to 10 billion and a 20% market share. Dea Capital will offer its knowledge of the market, while Barents Re will provide expertise in regard to re-assurances concerning the stability of the values for indirect real estate investments. The objective of the partnership is to offer products to institutional investors, included those under surveillance such as banks and insurance companies, that want to optimise the structure of their assets, to monetise or to book the capital gains or the capital appreciations, to obtain a more efficient absorption of capitals, also availing themselves of the latest regulations regarding this matter.

Source: Milano Finanza

Translator: Cristina Ambrosi

Sga working on a project concerning UTPs

26 January, Il Sole 24 Ore

Sga is working on a model to help Italian banks getting rid of UPTs (unlikely-to-pay) while helping companies. According to Il Sole 24 Ore, the Treasury-owned company has been working at the project for quite some time. Sga is working at the implementation of a national platform for the management of UTPs. The project is still at the initial stage, as it hasn’t found the right set up. According to the rumours, the Prelios has been selected as the technical partner. The company will be working with other advisors on the dossiers, like Bain & Co concerning the industrial part and the firm RccLex for the legal part.

The object of the fund is to act as a vehicle for UTP portfolios (single holdings included) amounting to a couple of billion of euro. The project would concern medium-sized Italian banks, but it might be extended in the future also to Ubi, Banco Bpm, Bper and other medium financial institutions.

As already mentioned, the details of the project haven’t been defined yet. There’s the possibility, for instance, that the capital to acquire the portfolios might be provided by Sga itself. The advantage for Sga is the opportunity of accessing the market by issuing obligations almost at the same cost as the State ones. Sga might also involve other institutional investors in the securitisation of the riskiest tranches.

Since Sga doesn’t have a banking license, it will have to be supported by other fronting banks in order to carry out the traditional banking activities and manage the relations with the creditors. After all, UTPs concern still existing relationships. Unlikely NPLs (which are uncollectable), in the case of UTPs, the debtor is going through a difficult time, and the credit still has chances to return performing. Therefore, a certain managerial expertise is essential to collect the holdings through a restructuring process, with the objective of relaunching the business activity rather than adopting a speculative approach. UTPs generally come with a real estate guarantee. Therefore, it’s likely that there will be an intervention addressing all the companies with real estate developments, land with funded properties that are vacant, shopping centres and hotels to be re-positioned. The returns would be adequate but not excessive as the primary objective here is to relaunch the companies. Hence, the UTP purchases will have to be carried out at prices aligned with the market, also to avoid possible remarks from the EU.

Banks might deconsolidate a part of their UPT stocks, release capitals and acquire new assets. The total UTP stock amounts to about 86 billion gross, while Italian banks are covered for 30% of the gross value. For the ECB Surveillance, getting rid of UTPs has become a priority. As seen the recent Srep drafts sent to the Italian banks showed, there’s the tendency to no longer difference between bad loans and unlikely-to-pay, as they’re both included in the group of non-performing exposures. But, as UTPs are still collectable credits, they’re valued more than bad loans and have a lower coverage.

As a result, banks have the priority to minimise the impact of transfers on the accounts. Hence, it means reducing at the minimum the possible capital losses. The pressure of the Central Bank to increase the guarantees for non-performing loans in the next years will definitely favour transfers.

Source: Il Sole 24 Ore

Translator: Cristina Ambrosi