Banca Farmafactoring, parent company of BFF Banking group, announced the private placement to institutional investors of a subordinated Tier 2 bond due in 2027, for a total nominal amount of 100 million euros.
The transaction represents the first-ever unrated Tier 2 by an Italian bank as well as the first Italian Tier 2 issuance in 2017, attracting strong interest from domestic and international institutional accounts alike.
The subordinated notes will have a final maturity date in March 2027 with an issuer call date in March 2022. The notes will carry an annual fixed coupon of 5.875% prior to the issuer call date.
Morgan Stanley acted as sole underwriter and lead manager on the transaction. White & Case LLP was legal counsel, while Clifford Chance Studio Legale Associato supported Morgan Stanley.
BFF Banking Group is the leading player in Europe in the management and nonrecourse factoring of receivables towards the public administrations.
The group is controlled by Centerbridge with a 94.25% stake, through BFF Luxemburg, while Italian industrial companies Bracco, Mediolanum Farmaceutici and La Molteni and the trust company Unione Fiduciaria hold the remaining stake. The banking group was said to be valued about 500 million euros when Centerbridge bought out the group in Spring 2015.
Last year the shareholders paid themself the distribution of an extraordinary dividend i soci hanno votato la distribution of a 68.76 million euros extraordinary dividend of which about 65 millions were paid to Centerbridge. The bank also issued a 150 million euros bond due in 2021 a scadenza 2021 last year, while in 2014 it had issued a 300 million euros bond.
Customer loans at the end of 2016 amounted to 2,499 million euros, compared to the previous year’s 1,962 million euros (excluding Magellan), and up by 8% versus June 30th 2016 including Magellan. Italy remains the main market for the group with 75% of total loans (89% at the end of 2015)., with foreign markets (Spain, Portugal and CEE) accounting for a quarter of the loans Magellan’s loans reached 447 million euros, 8% higher than year-end 2015 and accounting for 18% of total group loans.
In 2016 BGG Banking group recorded +24% increase in net banking income to 176 million euros from 142 millions in 2015, thanks to a solid business model, further funding optimisation, in addition to an efficient cost structure (cost/income ratio of 32%) and low credit risk (cost of risk 0.10%). In 2016 the group’s consolidated adjusted net profit was 88 million euros and the CET1 ratio for the banking group at year end 2016 was 16.7%.
Net profit combined with Magellan1 and adjusted2 amounts to 88million euros, excluding non-recurring costs of 11 million after tax, due to the extraordinary contribution to the Resolution Fund (1.5 millions net), the acquisition of Magellan (7.6 millions net) and preparation costs for a possible listing (2.4 millions net).
Actually in May Centerbridge mandated Mediobanca, Morgan Stanley and Deutsche Bank as its advisors for an ipo at the Italian Stock Exchange to be concluded by the end of the year with a floating capital of about 50%. The listing however was postponed to the first months of this year. On December 23rd 2016 Italian markets supervisory authority approved the Ipo registration document,
