In few hours the Italian Government investment arm Cassa Depositi e Prestiti (Cdp) is expected to announce an emergency plan intended to solve at once both the non performing loans and the capital increases issues for the Italian banking system. Cdp is actually going to promote the launch of a new investment fund among Italian institutional investors which is going to invest in those assets.
Of these issue representatives of all major institutional investors in Italy have been invited to talk in a meeting with representatives of the Ministry of Economy and Finance, Cdp and Bank of Italy today in order to reach an agreement by few hours and announce a plan before the Ministry Pier Carlo Paodan will travel to Washington for the scheduled IMF.
The plan should be operative before the 1.75 billion euros capital increase of Banca Popolare di Vicenza will start next April 18th. Unicredit is sole underwriter of the increase but in the last few days Unicredit’s ceo confirmed rumors about an expression of interest from Forterss for the subscribing part of the increase in a way that recalls the offer offer Apollo Global management made last week for Carige Bank that is to say an offer to buy the Npls portfolio of the bank and subscribe a capital increase reserved to the fund. Fortress is the same fund that bought Unicredit’s debt recovery unit UniCredit Credit Management Bank (Uccmb, now doBank).
Coming back to Cdp’s plan, the fund will be managed by an Italian asset managment company and will be financed by Cdp with no more than 300 million euros while other italian institutional investors such as bank foundations, insurance companies and pension funds, will subscribre the rest with a 5-7 billion euros target and the possibility to leverage,
As for the non performing loans activity, the fund is expected to work through securitization deals in order to buy Npl portfolios from the banks at the same price they are valued on banks’ books, then securitize them and sell them on the market retaining a small stake of them. Senior tranches might be guarateed by a public guarantee (socalled Gacs) that the Italian Minsitry of Economy and Finance announced to be soon available for investment grade tranches, This might be the only way to approach the huge Npls issue as net Npls value is more than 80 billion euros now on Italiian banks’ books,
