MILAN, Italy – Prelios, a major real estate group and AMCO, a state-owned bad loan manager in Italy, made statements on Friday.
Both parties have said that they came to an agreement with Banco BPM, UBI Banca, and Monte dei Paschi to create a platform that could help banks in Italy in terms of offloading their current UTP loans.
Over the recent years, banks in the country have been peeling their worst-performing loans to abide by the regulatory demands in line with their efforts to tackle the effects of a deep recession. It has been a huge issue of even the biggest lenders in the country for years. However, banks have now shifted most of their focus towards UTP or unlikely-to-pay loans, which are loans that are not currently in default yet but are improbable to be recovered in full.
Both Prelios and AMCO has already made a statement about the agreement. And according to the agreement, AMCO and the banks in Italy will move both small and medium-sized real UTP real estate loans they currently have towards a new monetary fund, which can be valued nearly $501 million (450 million euros).
The agreement will enable AMCO and the banks in the country to turn these non-performing credits that are weighing on their full-year results in 2019 towards a new fund. According to them, they also have a final target portfolio for the new fund, which is around 1.5 billion Euros.
The new fund from which the UTP real estate loans will be moved into will be managed by Prelios.
AMCO, which is a huge part of this new venture for the banks in Italy, is fully owned by the Treasury. AMCO has also played a major role in the bad loan market in the country after it has offloaded the impaired loans of two regional banks in 2017.
Earlier in 2019, AMCO has also purchased a portfolio full of soured debts, which has a gross book value of around 2.8 billion euros. The portfolio of impaired debts is from the failing lender Banca Carige.
Based on some sources, AMCO might also be rumored to take on the portfolio of soured loans from the ailing Monte dei Paschi, which can be valued by around 10 billion euros in total. The supposed purchase might come after a deal with AMCO is finalized, which the country has been in negotiation with some of the competition authorities in the EU for the past couple of months.