22 February, Milano Finanza
Mps is ready to launch its first de-risking operation of 2019. According to Milano Finanza, the bank is about to sell two UTP portfolios for a nominal value of approximately 500 million. The first portfolio is expected to be put on the market next week, while the sale of the second one won’t happen before the beginning of March. It might be the biggest operation of this type ever launched so far, as the deal will have approximately the same amount as the one launched last years (Project Alpha2) for 420 million.
So far, Mps has been selling UTPs through single name operations to obtain the best value and to reach the right investors to work in the stock. The strategy is similar to the one adopted by Unicredit, which is selling UTPs through small operations. Now, Mps decided to intensify the activities and to proceed with selling credits in bulk in order to accelerate the de-risking transactions. The sale of a UTP stock for a nominal value of 2 billion is expected by the end of the year. These operations follow the last year’s activities which saw the bank disposing of NPLs worth 29 billion by transferring them (27 billion) and reducing its UTP stock (2.3 billion). By the end of the year, the coverage rate was 53.1% (NPLs were 62.4%), and the cost of credit was 72 basis points.
Concerning the potential buyers of the new portfolio, it’s possible that they will be the same who took part in the recent operations: from the team composed of Aurora Recovery Capital – Gwm and the one consisting in Frontis – Algebris which got the Alpha2 portfolio at the beginning of the year. American groups such as Fortress and Cerberus and the fund Bain Capital Credit might be other participants in the competition.
There are operations in the pipeline also for what concerns the bank’s real estate properties. Mps is about to receive soon the offers for its portfolio amounting approximately to 600 million euro which was put on the market in the past months. Duff & Phelps is the advisor for the operation, which mostly concerns the bank branches that had been closed with the reorganisation process. It’s not to be excluded though that a part of the operation might involve sales & leaseback solutions, as other banks had done in the past few years. The portfolio includes the bank’s offices in Milan in Via Santa Margherita, as well as office buildings in Rome and Florence. Among the potential buyers, there are Blackstone, Starwood, Tristan Capital Partners, Lonestar, Apollo and Cerberus.
Finally, the Mps IT platform is also on the market, although there are no updates yet in this regard.
Source: Milano Finanza
Translator: Cristina Ambrosi