Tag: SGA

SGA becomes Amco to manage large the UTP portfolios of Mps and other large banks

19 September, Bebeez

The company owned by the Ministry of Finance SGA has become Amco (Asset Management Company). The rebranding aims at reflecting its nature of full-service credit manager. Moreover, the company had increased its staff from 144 employees in 2018 to 211 in 2019, forecasting the growth of the business activities.

Amco is expected to launch soon a fund to manage UTPs from medium and large Italian banks, according to the Cuvèe project. The fund will manage the UTPs of banks such as Banco Bpm, Mps, Ubi Banca and Carige. It will be managed by Prelios, which will also be in charge of the asset collection, while Amco will act as a special servicer and will raise new capitals. The fund is expected to start with assets for 1-2 billion euro to be increased to 3-4 billion euro lately. Finally, Amco is said to acquire the Mps UTP portfolio worth 7 billion euro.

Source: Bebeez

Translator: Cristina Ambrosi

Unicredit and Bper seeking to buy Carige for free in exchange for their NPLs

08 July, Finanza Online

Unicredit and Bper are considering the purchase of Carige at zero cost in exchange for their NPLs, which will be bought by the state-owned company Sga. For this purpose, the Treasury is about to loan Sga about one billion euro in order to buy the bad loans from the two banks.

Source: Finanza Online

Translator: Cristina Ambrosi

The EU imposes to Mps an advisor to sell UTPs for 7 billion euro to SGA. The Lima and Papa2 operations are about to close

12 June, Bebeez

The European Antitrust Authority has set limits to the transfer of UTPs for 7 billion euro from Mps to Sga since both parts have the Ministry of Economy as the main shareholder. The Authority imposed to Mps to appoint an advisor to supervise the operation to make sure it will be carried at market values. Oliver Wyman will likely be the advisor.

Meanwhile, the Papa2 and Lima operations are about to conclude. The former concerns UTPs backed by real estate for a gross value of 500 million euro. The buyer might be Cerberus. The latter is constituted by five or single-name holdings for 130 million euro and might go to Bank of America Merrill Lynch.

Source: Bebeez

Translator: Cristina Ambrosi

Sga and Credito Fondiario competing for Carige NPLs

19 February, La Repubblica

Countdown for the Carige operation concerning a significant portion of its bad loans. The competitive system set up by the three receivers Fabio Innocenzi, Raffaele Lener and Pietro Modiano seems to have given the expected results. There are allegedly two candidates: Sga, the company owned by the Ministry of Finance operating in credit collection and management, and Credito Fondiario. This latter acquired in 2018 from Carige part of the bank’s NPLs, about fifty employees and the NPL management platform. The disposal of bad loans for an amount of over one billion as planned by the receivers will be officially presented on 27th February.

In order to proceed with a possible merger, Carige intends strengthening its assets, and the issuance of two bonds with State guarantee is going in this direction, as well as getting rid of some of its bad loans. The plan will include a report on 2018. Since the bank is currently under temporary receivership, it’s not required to present a financial statement. The accounts are in red concerning the extraordinary reserves: the penal reserves for insurance division Amissima and the provisions for the transfer of Creditis to Chenavari.

Meanwhile, the Board of Directors has gathered to resolve on the NPLs. On the agenda, there is also the offer from Sga concerning the acquisition of part of Carige bad loans. The terms to submit the offers is set for next Friday. Credito Fondiario is among the candidates. Sga hasn’t made any statement in this regard.

Source: La Repubblica

Translator: Cristina Ambrosi

Carige: the data room for the NPLs and the merger has already opened

06 February, Finanza Report

Carige has already begun the data room for the transfer of bad loans and the merger.

As announced by the newspaper La Stampa, the Treasury-owned Sgd has already accessed the documentation regarding the transfer of bad loans for 1.5 billion. The dossier seems to have gotten the attention of Credito Fondiario and Illimity.

Concerning the merger, the consultant Ubs has already opened the data room, which is accessible upon signing of a non-disclosure agreement. However, the transfer of bad loans might have the priority since this would make the bank more appealing to a subject potentially interested in the operation.

The Carige stocks continue being suspended on the Stock Exchange.

Source: Finanza Report

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

Carige: negotiations with Sga regarding the NPLs

07 January, Reuters

The Carige special commissioners are currently negotiating with Sga, the company owned by the Treasury and managing bad loans, regarding the transfer of large part of the NPL and impaired loans portfolio amounting to 3.7 billion euro. The objective is to clean up the assets and make the bank more appealing for its sale.

The negotiations aim at defining the amount of NPLs on which Sga will have to focus its due diligence.

Other urgent actions might be the renegotiation with the FITD (the Italian deposit guarantee fund) of the voluntary scheme for the conversion of a bond worth 320 million. Moreover, the transfer of assets such as Banca Cesare Ponti and Banca Monte di Lucca is not to be excluded.

Source: Reuters

Translator: Cristina Ambrosi

Sga: binding offer for the securitisation of NPLs for 314 million from Banca del Fucino

21 December, Reuters

Sga, the company of the Ministry of Treasury managing bad loans amounting to 20 billion, presented a binding offer to Banca del Fucino to organise a securitisation of an NPL portfolio for a nominal value of 314 million.

The news was disclosed through a memo specifying that the portfolio is composed for 211 million by NPLs and by UTPs and past-due for the remaining 103 million.

Sga will act as a master and special servicer for the securitisation by subscribing the equity tranche.

The completion of the operation is scheduled for the first quarter of 2019, considering that the merger of Banca del Fucino and Igea Banca will happen in the same period.

Source: Reuters

Translator: Cristina Ambrosi

SGA focusing on UTPs in the new business plan up to 2023 and searching for new management mandates

19 October, Bebeez

SGA (Società Gestione Attività), a company owned by the Ministry of Economy and Finance, manages bad loans amounting to approximately 20 billion originated from the former Banca Popolare di Vicenza and Veneto Banca, along with 7 billion euro of unlikely-to-pay and past due credits. The company approved yesterday the guidelines for the new five-year business plan 2019-2023 which is based on three pillars:

diversified management between bad loans, unlikely to pay and past due credits: namely the so-called “gone concern” credits (to be collected) and the “going concern” credits (requiring a proactive management as they can return being regular credits), involving internal and external specialised professionals in order to optimise the collected amounts;

a proactive approach on the going concern holdings with the possibility to issue new funding to recover or preserve the company’s operations. It’s not by chance that SGA has launched the issuance of bonds for one billion euro in the past few months to obtain new capitals;

specialised professionals and innovative technologies for a business modal based on organisation, efficiency, flexibility and scalability.

Concerning the going concern credits, currently amounting to 7 billion, SGA stressed how these holdings require a proactive management focusing on the debtor, in order to recover and preserve the continuity of business and to normalise the financial position of the client, company or private. The objective is to maximise the value of the collection activities. For this purpose, SGA may issue new funding to favour the operational continuity of companies and the relaunch starting already from the reorganisation phase.

For what concerns the gone concern holdings, amounting to 12 billion, the approach must follow a strict procedure to maximise the value of the underlying guarantees, whenever present, and to optimise the judicial and extra-judicial collections. To achieve that, SGA is collaborating with the main players of the sector to use the economies of scale to achieve a standardised management of small NPE portfolios, maximising the collection performance, depending on the credit type, and optimising costs.

SGA, whose president and Ceo are respectively Alessandro Rivera, Treasury General Director, and Marina Natale, won’t just limit to manage its portfolio. As the memo disclosed yesterday reads, “SGA is intending to seek new opportunities on the market to achieve an adequate critical mass, leveraging the scalability of its business model. The objective is to maximise the economies of scale and to manage the collections efficiently and sustainably, obtaining new management mandates, especially in the going concern segment”.

Concerning the future SGA operations, the memo continues: “The plan for the next five years is based on a business model aimed at limiting costs and achieving an Ebitda margin equal to 35%, as well as a capitalisation with a Cet1 equal to 15%, which is an essential element to pursue new strategies and the expand our supporting activity to SMEs”.

Source: Bebeez

Translator: Cristina Ambrosi

Venetian banks and Sga: 25 thousand enterprises to save

16 April, Corriere del Veneto

The Sga management is ready to start. The contracts with the liquidation officers concerning Veneto Banca e Popolare di Vicenza were signed on Wednesday and went live at 8 pm on the same day with the disclosure by Banca d’Italia. After ten months of waiting, the management of the 18 billion-euro bad loans of the two banks started on 12th April. The operation went live through two separate asset allocations (the Vicenza group asset allocation and the Veneto group asset allocation) as per the decree from the Ministry of the Economy released on 12th April. Sga (Società Gestione Attività owned by the Ministry of Economy) will take care of the debts. The company was constituted to manage the credit collection for Banca di Napoli and it’s guided by Marina Natale, former Unicredit manager.

The liquidations

The workload is considerable. In fact, to the gross 18 billion euro, which represent the value of the credit towards Sga for the two liquidations and will have to be updated with the real values determined with the credit collections, correspond 112 thousand exposures among privates and companies. Customers will be notified next week of the passage to the Sga management. It’s obvious that Sga will focus on the 25 thousand companies with bad and impaired loans. Unlike the bad loans, where the activity will consist exclusively in credit collection, Sga will work on the other loans to bring at least a part of them back to performing, even though the late intervention won’t make this an easy task.

The credit management

It’s not by chance the Sga will care directly of the credit management. Only the bad loan management the will be assigned to 14 external servicers. An appointed team by Natale will work on the remaining loans. The team includes professionals such as Anna Tosolini, with a background in Bpvi and Bper.  In the meanwhile, Sga has constituted an office in Milan in Via Turati, besides its headquarters in Naples. In addition, two task forces are working on site in the two banks’ offices in Vicenza and Montebelluna, helped by the former employees of the banks who were working on the loans in the past and with the assistance of 70 employees from Intesa Sanpaolo. There is a lot of concern regarding the many holdings Sga will have to work on. Agostino Bonomo, leader of the regional artisans’ association, is worried about the couple of thousand holdings below 30 thousand euro: managing them promptly seems to be rather impossible.

Confartigianato

Confartigianato is ready for the new phase. “We’ve put a lot of pressure in the past few months in order to act promptly, aware that one more day of delay would have compromised the loans – says Bonomo – We’re happy with the new Sga management, which will finally manage these credits. Hoping to act as soon as possible, we’re open to the dialogue. We hope that a large part of the loans may return being performing, we’ll cooperate in order to achieve that. We’ll ask the Region to assist us with the already experimented counter-security methods.

Source: Corriere del Veneto

Translator: Cristina Ambrosi