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Investors show keen interest in Banco BPM bad debt portfolio


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According to Market Intelligence, April 2023

Investors show keen interest in Banco BPM bad debt portfolio

Banco BPM SpA will sell its debt collection business if it finds a buyer for almost all its remaining bad loans, Reuters reported June 20, citing CEO Giuseppe Castagna.

The bank is attracting a lot of interest from potential buyers for bad loans with a value of between €3.5 billion and €10 billion, with one source telling the newswire bids would probably be toward the top of the range.

On June 18, Reuters reported, citing sources, that doBank SpA, Credito Fondiario SpA, Prelios SpA and Guber SpA are said to be interested in buying the debt. A consortium comprising U.S.-based Christofferson Robb & Co. LLC, Italian financial vehicle SPAXS and debt collection company Fire are also among expected bidders, the sources said.

Castagna said it would look to sell its debt collection unit if it could get rid of almost all the nonperforming loans, as it would make little sense to keep it in that scenario.

Banco BPM said June 15 that it had completed the securitization of a defaulted loan portfolio with gross nominal value of €5.1 billion to a special purpose vehicle.

Upon completion of the securitization project, Banco BPM will have offloaded €9.5 billion worth of bad loans since the beginning of 2016, in line with its €13 billion target by the end of 2020 under a new derisking plan.

A team of Deutsche Bank, Mediobanca Banca di Credito Finanziario and Banca Akros structured the transaction for the asset-backed notes, while Chiomenti and Riolo Calderaro Crisostomo helped with the legal matters of the deal. Prelios Credit Servicing SpA is managing the receivables on the vehicle's behalf.