After obtaining the necessary authorizations from the competent Authorities, Intesa Sanpaolo and Prelios have finalized the strategic partnership concerning receivables classified as unlikely to pay (UTP – Unlikely To Pay). The agreement, signed and disclosed to the market on 31 July last, includes a servicing contract by Prelios aimed at maximizing returns to performing status and the sale and securitization of a portfolio of UTP loans in the Corporate and SME segment of the Intesa Sanpaolo Group. The partnership with Prelios will allow the Intesa Sanpaolo Group to focus on the proactive management of loans in the early stages of non-performing loans and to further accelerate the achievement of the objective of reducing non-performing loans indicated in the 2018-2021 Business Plan.
Prelios will make all of its market expertise available in the field of credit servicing, having set up – for the management of UTPs – a team with unique characteristics on the market from the point of view of people, processes and systems. Prelios will also be able to leverage, in the management of the real estate component of Unlikely To Pay credits, its historical expertise which covers the entire real estate value chain. For the corporate part of the UTPs, it will leverage an innovative industrialized credit management process - within an ecosystem that relates to all the subjects involved - aimed at identifying from time to time the best solutions that give companies concrete prospects of recovery, to the benefit of the real economy.
The agreement provides for two operations, described below:
- a ten-year contract for the servicing of UTP credits in the Corporate and SME segment of the Intesa Sanpaolo Group by Prelios, with an initial portfolio of approximately 6,7 billion euro gross of value adjustments;
- the sale and securitization of a portfolio of UTP loans in the Corporate and SME segment of the Intesa Sanpaolo Group amounting to around 3 billion euro gross of value adjustments, at a price of around 2 billion euro, in line with the value of load.
These transactions are carried out in compliance with the Group's economic and financial objectives and forecasts already disclosed to the market for the 2019 financial year and for the 2018-2021 Business Plan and do not affect the strategic partnership with Intrum. Intesa Sanpaolo was assisted by Rothschild for the financial aspects and by McKinsey for the industrial component. Banca Imi acted as arranger of the securitisation. Chiomenti acted as sole legal advisor for the structuring and negotiation of the transaction. Deloitte and Deloitte Legal supported the due diligence and portfolio management activities. Prelios was assisted by Bain & Company, Orrick, RCCD, Linklaters, Mediobanca, JP Morgan, Houlihan Lokey.
