28 January, Milano Finanza
Banco Bpm might take a big step forward in the cleanup process of its assets. According to Milano Finanza, the business plan for the 3-billion-euro portfolio that the bank is intending to securitise will be ready shortly thanks to the help of Prelios. The perimeter of the action will be defined by mid-February when the bank will have to submit to the rating agencies the necessary documentation. The bank aims at obtaining the Government guarantee by the end of April in order to issue notes under the supervision of Mediobanca. With this operation, together with other single name transfers of real estate nature, Banco Bpm might be able to reach its target set in the strategic plan for 8 billion already by the middle of 2018. A result that should make the ECB happy. Moreover, we must remark the several transfer operations carried out by the bank. For instance, in June, the group led by Giuseppe Castagna sold to Algebris the project Rainbow portfolio for a value of 693 million, composed of holdings backed by commercial, touristic, hospitality and residential real estate. In the second part of 2017, the bank disposed of the Sun portfolio valued 1.8 billion euro, sold to J Invest and Hoist Finance. Now it will be the turn of a securitisation that, thanks to the state guarantee, will allow the bank to obtain a price higher than average, reducing in this way the assets. We must also consider that Banco Bpm has adopted a mixed strategy for the management of bad loans. In fact, the NPLs of the banks have a high level of collateralisation, with an average ratio between the value of the guarantees and the net book value equal to 250% and higher than 100% in 85% of the total volumes. Even admitting a generous estimation of some assets, the assets put as guarantee have generally a higher value than the credits registered on the books net of depreciation.
Returning to Gacs, it seems like this instrument of structured finance is back on fashion in this start of the year. In fact, the extension of the state guarantee expires in the summer and many banks are intentioned to use it. Among these, besides Banco Bpm, there is Bper that will use it for the parent company as well as for its subsidiary Banco di Sardegna. And it’s not to exclude that other deals will follow.
Source: Milano Finanza
Translator: Cristina Ambrosi