Banca Mps and Deutsche Bank today reached an agreement on the early closure of the so-called Santorini operation. This was announced in a press release by Mps which recalls that the name of Santorini indicates the operations, carried out between December 2008 and July 2009, concerning an investment in Btp maturing in May 2031 for a value of 2 billion, financed with a Long Term Repo with the same duration and an Interest Rate Swap entered into with the aim of reducing the interest rate risk of the investment.
Thanks to the agreement, MPS estimates that it has obtained a lower transaction closing cost of around 220 million and a capital benefit for Basel 3 purposes of around 25 basis points. The transaction also results in a negative 'one off' impact on the 2013 income statement of approximately €194 million after tax, offset by a positive impact on the income statement (interest margin) of €33 million per year since 2014 on. Finally, the agreement allows for an immediate repayment of approximately 170 million in liquidity.
