Banca Popolaredell'Emilia Romagna SC completed the without recourse of a bad loanportfolio with a total gross book value of approximately €450 million toAlgebris NPL Fund and CerberusCapital Management LP's Cerberus European Investments.

The loans within the portfolios are mainly backed by realestate collateral and related to corporate counterparties. The unsecured partof the portfolio amounts to approximately €58 million.

BPER said the transactions are part of its bad loanmanagement strategy,under which it intends to reduce the stock of bad loans and to improverecoveries. The transaction will not have a significant effect on the bank'sconsolidated income statement.

Oliver Wyman acted as the arranger of the sale, with BancaIMI's Credit Solutions Group assisting on the financialstructuring and Orrick Herrington & Sutcliffe on the legal aspects of thedeal.

Another transaction is expected in the second half.