Bank loan

UniCredit closes $1.2 billion bad debt securitization deal

MILAN, June 15 (Reuters)The second Italian bank UniCredit IDRC.MI said it completed the securitization of 1.1 billion euros ($1.15 billion) of bad debts, hiring doValue DOVA.MI to serve the transaction.

UniCredit said on Wednesday the deal was its fifth non-performing loan (NPL) securitization backed by the state guarantee scheme “GACS”.

The scheme expired on Tuesday and sources told Reuters the Treasury plans to renew the measures after the summer holidays, tightening their terms to reduce the risk that taxpayers will be left behind.

UniCredit said it has accepted a binding offer from an investor to buy 95% of the mezzanine and junior notes in the latest GACS-backed bad debt securitization.

The bank will retain a 5% stake.

After selling the bulk of the notes, UniCredit said it would ask the European Central Bank for permission to remove the €1.1 billion bad debt portfolio from its books, an accounting process known as name of “derecognition”.

In a separate statement, doValue said it already has part of UniCredit’s securitized loan portfolio under management, and would add around €500 million to its loans under management through the servicing role on the transaction.

DoValue, whose main investor is the Japanese group SoftBank 9984.Tentered into a long-term loan collection agreement with UniCredit, but faces competition from rival Prelios, which also recently secured loan servicing contracts with UniCredit.

($1 = 0.9591 euros)

(Reporting by Federico Maccioni, editing by Valentina Za)

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