The Npl portfolio under securitization by Unicredit with senior tranches guaranteed by Italian Government’s guarantee (Gacs) is worth 6.057 billion euros. This can be read in the report recentely released by the German agency Scope Ratings which assigns the preliminary ratings to the three tranches of asset-backed securities issued by SPV Prisma srl (see the press release here). The deal was expected by the end of September, but then there were talks of a securitization of a 5 billion euros portfolio (see here a previous post by BeBeez).
According to Scope Ratings, the portfolio is composed of both senior secured (64.0%) and unsecured (36.0%) loans (including junior secured loans). The loans were extended only to individuals. Secured loans are backed mostly by first-lien mortgages on residential properties (90.2% of property values), whilst the remainder collateral (9.8%) is composed of commercial, land and other type of properties. Properties are well distributed across Italy, with similar shares in the north (37.1%), centre (24.2%), and south (38.6%) of Italy.
Prisma has issued a total of 1.32 billion euros of asset backed securities for an average price, therefore equal to 21.8% of the GBV. In particular, there is a 1.210 billion euros senior class A, with a BBB + rating; an 80 million euro mezzanine class B with a B- rating; and a 30 million euro junior class J junior with no rating. Classes A and B will pay a variable rate equal to the euribor six-month rate, plus a margin of 1.5% and 9% respectively. For Unicredit this would be the second largest sale after the Fino project launched in 2017, worth 17.7 billion euros (see here a previous post by BeBeez).
The bank has other deals underway on the NPEs front: last August it sent teasers to a small number of investors for the sale of an UTPs loan portfolio called Project Dawn with a GBV of one billion euros (see here a previous post by BeBeez). Furthermore, at the beginning of June Unicredit announced the start of the second phase of the Sandokan program with the signing of the agreement to entrust the management and special servicing activities relating to the loan portfolio unlikely to pay real estate named Sandokan 2 to Pimco, Gwm and Arec (Aurora Recovery Capital) for a maximum amount of 2 billion euros, to be sold in several successive tranches (see here a previous post by BeBeez). Unicredit is still involved in one of the major deals expected in the coming months: in fact, the bank has decided to market part of a 13.3 billion euro UTPs portfolio and grant a management mandate for the other part(see here a previous post by BeBeez), along the lines of the agreement that Intesa Sanpaolo has entered into with Prelios sgr in relation to a total portfolio of 10 billion UTPs.
Last September, Unicredit announced the sale of another 730 million euros of non-performing loans to an Illimity securitization vehicle (see here a previous post by BeBeez). This is the so-called Matera portfolio, consisting of secured corporate positions guaranteed mainly by industrial and commercial assets, which initially had a wider perimeter, there was talk of 750 million (see here a previous post by BeBeez). At the same time, Jose Brena, head of non-core asset management, confirmed the bank’s Npl reduction targets during the eighth edition of the Npl Meeting, organized in Venice by Banca IFIS on 26 and 27 September (see here a previous post by BeBeez): “Our ceo asked us to get close to 10 billions at the end of the year, we’ll get there, one way or another”. The ceo of Unicredit, Jean Pierre Mustier, commenting at the beginning of August on the half-year results of the banking group, had in fact said: “The gross impaired credit exposures of the non-core bank have been drastically reduced and by the end of 2019 they will be close to 10 billion of euro, well below our initial Transform 2019 goal (see here a previous post by BeBeez), reiterating what was already stated in the call with analysts commenting on the quarterly report. Already back then Mustier had clarified that non-core NPEs should fall significantly beyond the 2019 target of 14.9 billion, towards 10 billions (see here a previous post by BeBeez).
At the end of last June the group’s gross impaired loans had fallen to 34.4 billions (from 37.6 billion at the end of March) with the gross NPE ratio which thus dropped to 7% (from 7.6%), with a coverage rate of 61% (from 61.7%). Core non-performing exposures had fallen to 18.7 billion euros (from 19.8 billions), with a ratio between gross impaired loans and total gross loans to 3.9% (from 4.2%) with a coverage rate of 56, 7% (from 58.1%). Non-core gross NPEs instead declined to 15.7 billions (from 17.7 billions) with a 66% coverage ratio (from 65.8%).