My Workshop at NPL Meeting

Savethedate on September 27th I am going to present a workshop at Banca IFIS‘ NPL Meeting

Cattura The topic I am going to cover is

PORTFOLIO MANAGEMENT AS KEY DRIVER FOR BOTH BUYERS AND SELLERS IN NPL MARKET

The workshop will take place in 2 time slot

  • 2:30 PM – 3:00 PM – Palazzo del Cinema – Sala 7
  • 4:00 PM – 4:30 PM – Excelsior – Sala Morosini

In order to attend the workshop you need to register to the main event at this link 

Then you will be allowed to access the workshop page where you can book by clicking on the appropriate button as showed below

Cattura

 

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GLG – Gerson Lehrman Group – Council Member

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Italian NPL Update 2018-07

Cerberus Capital Management announced an agreement to acquire a 57% share of Officine CST SpA, Headquartered in Rome, the acquired firm provides integrated credit management services to large enterprises such as banks, institutional investors, utilities, and multinational companies, as well as small and medium sized enterprises. The company manages over €16 billion in claims and employs 150 people in Italy.

Banca IFIS has finalized an agreement to acquire control over FBS S.p.A.,
a company established by Paolo Strocchi operating in the NPL segment as a servicing specialist (including both master and special services), manager of secured and unsecured NPL portfolios, due diligence advisor, and investor authorized to conduct NPL transactions.

In addition to the large NPL securitization  deal recently closed (Italian news), MPS is planning Further bad loan disposals for at least EUR 2.6bn in 2018 with Estimated impact of disposals already included in IFRS 9 FTA.

Cattura

PWC published a new update in its Italian NPL Market Report. After the peak in 2015 NPEs have been decreasing in Italy with a sharp decline of some 60Bn in 2017 wich could continue in 2018 when some 70Bn sales are expected. After Bad Loans successful reduction process that is expected to continue in 2018-19, Unlikely To Pay are the next focus of the market facing the challenges of this specific asset that often need new lending and turnaround skills to be properly managed.Special Servicing Market is the most relevant opportunity since it could involve not only exposures sold or securitized but also the outsourcing of those assets that will remain on banks’ balance sheets.

Banco BPM closed a 5.1Bn  NPL securitization deal (Italian News) named project Exodus and launched project Ace a 3.5Bn NPL portfolio sold in bundle with a stake in the credit management platform of the bank.

Intesa Sanpaolo is planning to sell a 250m Unlikely to Pay (UTP)  portfolio in a sale named Progetto Levante. This new deal comes after the closing of a relvant JV agreement signed with Intrum Lindorff aimed to create a new servicing platform with 40Bn NPL under management. Some 10.8 Bn of these assets will be disposed by the bank through a securitization scheme.

Credito Valtellinese completed the securitization of a bad loans (sofferenze) portfolio for a Gross Book Value (“GBV”) of some EUR 1.6 billion (“Project Aragorn”), through the transfer of such portfolio to a securitization vehicle  named Aragorn.  The vehicle issued three classes of ABS: a senior tranche of 509.5 million backed by Gacs; a mezzanine tranche with investment rating of 66.8 million; a junior tranche of 10 million. In a separate press release the bank announced that  sale to institutional investors of the 95 per cent of the mezzanine and junior notes has been completed.

Credito Fondiario acquired a portfolio consisting of secured non-performing loans of the Creval Group for a gross book value (“GBV”) of EUR 222 million – which includes real estate financial leases for a GBV of over EUR 56 million – at a price close to 41% of GBV.
The portfolio consists of credit exposures mainly to real estate companies, classified as unlike to pay and bad loans.

Bain Capital Credit acquired a portfolio of NPLs with a gross value of 100 million from Alba Leasing .

Axactor has entered 3 new forward flow agreements including a significant forward flow with a financial institution in Italy. The portfolios contain unsecured consumer claims with an outstanding debt value of 140 mEUR per annum across approximately 28.000 claims, with the contracts covering a 12month period.

Do you like my updates? subscribe my newsletter 

Are you interested in Italian banks and NPL/UTP market?

Ask for a briefing by sending me a private message (in person or via conference call) .

To get further updates Join the Linkedin Group – Entering Italian NPL Market  and follow #Liberi Di Scegliere via @blastingnews

@massimofamularo

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GLG – Gerson Lehrman Group – Council Member

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New PWC Report on Italian NPL market

Several interesting insights in the last issue of Italian NPL Market the regular publication of PWC covering Italian Banks, Real Estate Servicing and Non Performing Exposures.

After the peak in 2015 NPEs have been decreasing in Italy with a sharp decline of some 60Bn in 2017 wich could continue in 2018 when some 70Bn sales are expected.

Cattura

After Bad Loans successful reduction process that is expected to continue in 2018-19, Unlikely To Pay are the next focus of the market facing the challenges of this specific asset that often need new lending and turnaround skills to be properly managed.

Cattura

Special Servicing Market is the most relevant opportunity since it could involve not only exposures sold or securitized but also the outsourcing of those assets that will remain on banks’ balance sheets.

Cattura

Here the link to the Report

Do you like my updates? subscribe my newsletter 

Are you interested in Italian banks and NPL/UTP market?

Ask for a briefing by sending me a private message (in person or via conference call) .

To get further updates Join the Linkedin Group – Entering Italian NPL Market  and follow #Liberi Di Scegliere via @blastingnews

@massimofamularo

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GLG – Gerson Lehrman Group – Council Member

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Talking about ECB guidelines and Italian Banks

This week I am going to attend the Corporate Parity’s 3rd Annual Global Debt Collection & NPL Portfolio Summit and will present a case study regarding ECB guidelines and potential impacts on Italian Banks.

Link to the Event

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Do you like my updates? subscribe my newsletter 

Are you interested in Italian banks and NPL/UTP market?

Ask for a briefing by sending me a private message (in person or via conference call) .

To get further updates Join the Linkedin Group – Entering Italian NPL Market  and follow #Liberi Di Scegliere via @blastingnews

@massimofamularo

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GLG – Gerson Lehrman Group – Council Member

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Largest NPL securitization closed by BMPS

Monte dei Paschi di Siena Group (“BMPS”) has completed the securitization transaction for the sale of a bad loan portfolio of c. EUR 24.1 billion and obtained investment grade ratings on the senior tranche. (press release).

The senior tranche, worth R 2,918 million has received an Investment Grade Rating by 3 agencies:

  1. Moody’s Investors Service: A3
  2. Scope Ratings GmbH: BBB+
  3. DBRS: BBB

According to BDRS Press release 

  • the majority of loans in the portfolio defaulted between 2000 and 2017 and are in various stages of resolution.
  • The receivables are serviced by Credito Fondiario S.p.A. (Credito Fondiario), Italfondiario S.p.A., Juliet S.p.A. (a joint venture between Cerved S.p.A. and the servicing platform of Banca MPS) and Prelios S.p.A. (collectively, the Special Servicers) with Credito Fondiario operating as the Master Servicer in the transaction
  • Approximately 57.8% of the pool by GBV is secured and 51.0% of the secured loans by GBV benefit from a first-ranking lien.
  • The secured loans in the portfolio are backed by properties located across Italy, with concentrations in the regions of Tuscany, Veneto, Lombardy and Campania.

Do you like my updates? subscribe my newsletter 

Are you interested in Italian banks and NPL/UTP market?

Ask for a briefing by sending me a private message (in person or via conference call) .

To get further updates Join the Linkedin Group – Entering Italian NPL Market  and follow #Liberi Di Scegliere via @blastingnews

@massimofamularo

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GLG – Gerson Lehrman Group – Council Member

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Italian NPL Update 2018-05

Intrum Lindorff and Intesa Sanpaolo have agreed to establish a servicer of non-performing loans (NPLs) in Italy by merging Intesa Sanpaolo’s NPL recovery operations and all of Intrum’s current Italian operations. The new venture will start with 40 Bn Asset Under Management. The deal includes also that Intrum together with CarVal Investors, will acquire a 51% participation of a NPL portfolio with a Gross Book Value (GBV) of EUR 10.8 billion to be deconsolidated from Intesa Sanpaolo (news in Italian)

unicredit_shu_551825293_1600x900

Unicredit is launching project Torino a 1Bn Unsecured portfolio sale and is expected to arrange a new tranche of former project Sandokan with a secured portfolio up to 3Bn that shoud be acquired by the same investors Pimco, Gwm e Finance Roma.

KRUK has signed a contract to acquire 51% stake in Agecredit srl based in Cesena, operating on the Italian third-party debt collection market. The transaction will strengthen the development of the key segment of Group’s operations – third-party debt collection business. Ultimately, within a few months, KRUK will own 100% of the company.

Anacap and Pimco acquired a majority stake in Phoenix Asset Management (Pam) an Italian sprecial servicing company founded by Steve Lennon, Paolo Lo Giudice e Roberto Tavani that will remain as manager and minority shareholders.

Banca IFIS closed 3 NPL deals in the first quarter 2018

  • a twelve-month agreement for the purchase of the annual production of unsecured, consumer, non-performing loans (credit cards and personal loans) of one of the leading Italian consumer credit companies, by forward flow (transfer of loans on a quarterly basis) -the first transfer of these loans was carried out for a value of approximately 35 million Euro (nominal value), corresponding to over 4,500 positions
  • a financing transaction for a portfolio of mainly secured non-performing loans, originated by a leading Italian banking group and acquired by a company affiliated to Cerberus Capital Management.
  • the sale of some consumer-type portfolios having a nominal value of approximately 40 million Euro. The transaction was finalised with an international distressed investor, active in the secondary market.

Carige approved the Non PerformingExposure strategy for the 2018-2020 period (the “NPE Strategy”) which includes the disposal of an additional bad loan portfolio for a gross amount of up to EUR 1 bn, on top of the already-planned disposal of Unlikely-to-Pay exposures (UTPs) for a gross amount of approximately EUR 500 mln, having assessed the accounting treatment of the effects arising from the First Time Adoption (FTA) of IFRS 9.
To give effect to the NPE Strategy, a portfolio of up to EUR 1 bn will be selected out of a total bad loan portfolio of approximately EUR 1.7 bn as at 31 December 2017, which will be disposed of on the market, with senior notes backed by the Italian Government guarantee (GACS).

Creval has signed an agreement with Algebris Investments for the sale of a portfolio consisting of secured non-performing loans (mainly classified as unlike to pay) for a gross book value (“GBV”) of over EUR 245 million, at a price higher than 43% of GBV.
This transaction allows the realization of approximately 50% of the targets for the sale of nonperforming loan (“NPL”) set for the so-called “Project Gimli” for 2018.

Arrow Global acquired 2 Italian firms,  Europa Investimenti, a manager of Italian distressed debt investments, for an equity value of €62m (£54.7m) and 100 percent of Parr Credit, a Rome-based servicer of Italian non-performing loans for an equity value of €20m.

Do you like my updates? subscribe my newsletter 

Are you interested in Italian banks and NPL/UTP market?

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@massimofamularo

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GLG – Gerson Lehrman Group – Council Member

 

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Intrum ready to close the deal with Intesa

As communicated yesterday Intrum has submitted a binding offer to Intesa Sanpaolo regarding the establishment of a servicer of non-performing loans (NPLs) in Italy.

Highlights

  • Intrum and Intesa Sanpaolo have agreed to establish a market leading servicer of non-performing loans (NPLs) in the Italian market, involving the two transactions outlined below:
    1. Merger of Intesa Sanpaolo’s NPL recovery operations and all of Intrum’s current Italian operations* into a leading servicer of NPLs in Italy (Joint Venture Servicer)
      •  Intrum will own 51% of the Joint Venture Servicer.
      •  The Joint Venture Servicer enters into a 10-year exclusive servicing
      • greement with Intesa Sanpaolo for the vast majority of the bank’s new NPL inflow during this period
      •  Intrum will consolidate the Joint Venture Servicer in the financial reporting.
    2. Intrum, together with CarVal Investors, will acquire a 51% participation of a NPL portfolio with a Gross Book Value (GBV) of EUR 10.8 billion to be deconsolidated from Intesa Sanpaolo. The portfolio will be held by a securitization Special Purpose Vehicle (SPV).
      •  Intrum will own 80% of the 51% of the holding in the SPV.
      •  CarVal Investors on behalf of its managed and advised funds including Fondaco SGR S.p.A have committed to co-invest for an amount corresponding to the remaining 20% of the 51% holding in the SPV.
      • The SPV will be financed by non-recourse senior asset backed notes.
      •  Intrum will not consolidate the SPV in the financial reporting.
  • The aforementioned transactions reflect an overall valuation of around Euro 3.6 billion for the Joint Venture Servicer and the NPL portfolio.
  • Intrum’s estimated total net cash investment for its holding in the servicing platform and its interests in the SPV is EUR 670 million. The net investment envisages no further syndication.
  • Intrum will make an initial payment of EUR 156 M at the end of April 2018. The remainder of the purchase price will be paid at closing, which is expected at year-end 2018.
  • The transactions represents a significant reinvestment of proceeds from the remedy units divested in March 2018 and hence a significant contribution to Intrum’s planned M&A and portfolio investments in 2018, in turn supporting Intrum’s ambitions for profitable growth.
  • The transactions are subject to authorizations being received from the relevant authorities.
  • Italy is one of the largest markets for NPLs in Europe which highlights the importance of this long term strategic partnership.

Link to full press release

“This innovative transaction is a milestone for Intrum and provides us with long-term access to the large Italian Credit Management Services market. Together with Intesa Sanpaolo we are building a Credit Management Services provider in one of the largest European markets that will draw on our mutual strengths. The joint venture sets a new standard in the market where two experienced industrial players join forces to create a market leader servicer in Italy,” says Mikael Ericson, President and CEO of Intrum.

Joint Venture Servicer

Intrum and Intesa Sanpaolo will set up a Joint Venture Servicer into which the bank contributes its NPL servicing platform and Intrum will contribute all its current Italian operations (apart from Cross Factor S.p.A. and the holding company Lindorff Italy S.r.l.). Intrum will own a majority interest of 51% in the joint venture. Intrum will appoint the majority of the board members as well as the CEO. The new company will operate under the Intrum brand and Intrum will consolidate it in the financial reporting.

The Intesa Sanpaolo NPL servicing platform currently has around 600 employees and services a portfolio of non-performing loans of approximately EUR 30 billion. The Joint Venture Servicer will continue to service these volumes and also benefit from a 10-year exclusive servicing agreement with Intesa Sanpaolo in relation to the vast majority of Intesa Sanpaolo´s new inflows.

The Joint Venture Servicer will offer leading specialist servicing capabilities to banks and other creditors as well as portfolio sale services that will allow banks to de-risk their balance sheets through long term established relationships with one of the market leaders.

NPL portfolio

Furthermore, Intesa Sanpaolo will divest a portfolio of non-performing loans with a EUR 10.8 billion gross book value, of which the majority are secured loans. Intesa Sanpaolo will retain a 49% interest in the SPV. The SPV will be participated by Intrum, together with one or more co-investors. CarVal Investors, a leading global alternative investment fund manager with approximately USD 10 billion in assets under management, has provided a commitment to co-invest with Intrum for an amount corresponding to 20% of the 51%.

Intrum will make an initial payment of EUR 156 million at the end of April 2018. The remainder of the purchase price will be paid at closing.

The portfolio acquisition will be part-financed at closing through issuance of asset backed senior notes, the subscription of the notes is guaranteed by a bank consortium with the following key terms:

  • Legal Maturity: 5.5 years, Senior LTV: 60%, Senior Interest Rate: EURIBOR 1m (floored at zero) + 325bps, Undrawn Interest Rate: 325bps and Upfront Fees: 100bps
  • The commitments from the bank consortium are subject to conditions, including but not limited to, satisfactory documentation and regulatory approvals

***

“Italy is one of the largest markets for non-performing loans in Europe with over EUR 300 billion of non-performing loan exposures on banks’ balance sheets. Through this partnership we gain a larger access to the growth opportunities that the Italian market provides. We see that banks are increasingly looking to outsource parts of their receivables management to sophisticated specialist servicers that are able to recover outstanding debts in a professional and compliant manner, and restore bank’s customer’s credit worthiness in an efficient and respectful way,” says Mikael Ericson.

The transaction represents a significant contribution to the group’s planned M&A and portfolio investments in 2018 and will support Intrum’s ambitions for profitable growth.

Intrum remains committed to the long-term target of net debt/cash EBITDA of 2.5-3.5 and whilst immediately after the transaction the net debt/cash EBITDA ratio is estimated to approximately 4.5x for the Intrum Group this is a temporary effect and the net debt/cash EBITDA ratio will decrease in the first 12 months as the cash flow from the portfolio is gradually included in the calculation of leverage. Intrum’s expectation is to be in the middle of the target range by 2020. The transaction is expected to be earnings per share accretive in 2019.

The overall transaction is expected to close at year-end 2018. The Joint Venture Servicer will be consolidated into the accounts of the Intrum Group as per closing date. The NPL portfolio is to be transferred into the SPV in April 2018, with investors being exposed to the risks and rewards of the portfolios from January 1 2018. Net collections between January 1, 2018 and closing will be deducted from the gross purchase price.

The completion of both parts of the transaction is subject to authorizations being received from the relevant authorities.

Do you like my updates? subscribe my newsletter 

Are you interested in Italian banks and NPL/UTP market?

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To get further updates Join the Linkedin Group – Entering Italian NPL Market  and follow #Liberi Di Scegliere via @blastingnews

@massimofamularo

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GLG – Gerson Lehrman Group – Council Member

Posted in Entering Italian NPL Market, Italian Banks | Tagged , , | 1 Comment