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Ubi sold NPL for 2.75 billion at 23% their book value

02 August, Milano Finanza

Ubi Banca finalised the transfer to the special purpose vehicle Maior SPV Srl of a bad loans portfolio with gross book value amounting to 2.75 billion at the end of 2017. The selling price is “substantially aligned with the current book value of the net credits sold” (23% of the nominal value, as Equita Sim reports) and compliant with the regulation concerning the guarantee on NPL securitisation (Gcas). The operation is included in the NPL reduction plan whose target is to bring the gross NPL ratio below 10% by the end of 2019.

The portfolio is mainly composed of unsecured loans (53.4%) and secured loans (46.6%). The special purpose company issued senior, mezzanine and junior notes that Uni subscribed in different ways. The investment grade senior notes amount to 628.5 million, corresponding to 22.86% of the gross nominal value and 38.9% of the gross debt on the financial statement. Ubi will keep these notes in its portfolio, with a coupon equal to 6 months Euribor+0,5%. The rating agencies Scope Ratings Gmbh and Dbrs rated them respectively BBBsf e BBB (low)(sf).

The mezzanine notes are equal to 60 million euro, while the junior notes amount to 26.9 million euro, both with no rating. The divestiture effects of the securitisation will be registered in the third quarter accounts. Following this re-risking operation, the gross NPL ratio on the total gross credits has gone from 12.74% to 11.3%, based on the pro-forma data in March 2017. Ubi doesn’t expect that operation will have a negative impact on the capital ratio. The bank’s forecast instead is for a reduction of the Texas ratio of about 10 percentage points (it was 98.9% on 31st March).

Furthermore, Ubi is currently defining another NPL portfolio, 90% unsecured, of a lower value than the one just securitised. This portfolio will be transferred between the end of the year and the beginning of 2019 and won’t be securitised. The operation was arranged by Mediobanca Banca di Credito Finanziario and Société Générale.

The law firms Chiomenti and RCC assisted respectively Ubi Banca and the arrangers concerning the legal aspects. The special purpose vehicle Maior SPV appointed Prelios Credit Servicing as servicer and special servicer for the securitised portfolio, working on the credit management and collection. Securitisation Services will cover the role of Corporate Services Provider.

Source: Milano Finanza

Translator: Cristina Ambrosi

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