As part of a broader program of interventions on non-performing loans, Banca Popolare di Bari and the subsidiary Cassa di Risparmio di Orvieto sold a portfolio of non-performing loans for a gross value of Euro 319,8 million to a securitization vehicle established pursuant to law 130/99, which in turn issued three slices di notess ABS: a senior, with a BBB-/Baa3/BBB rating from the DBRS, Moodys and Scope agencies, respectively, equal to Euro 80,9 million and eligible for the GACS, a mezzanine, Equipped with rating B (low) and B+, respectively, by DBRS and Scope equal to Euro 10,1 million and a junior , not equipped with rating, equal to Euro 13,5 million. The total value of notes issued is therefore equal to 32,7% of the nominal value of the receivables assigned. All the notes will be deemed to closing by Banca Popolare di Bari. The GACS will be formally issued at the end of the request process.
The operation was structured by the Parent Company Banca Popolare di Bari with the team of JPMorgan, an investment bank active in the Italian structured finance market, which also performs the role of placer of the securities issued. The transferred portfolio is made up of 56% of mortgage loans and the remaining 44% of unsecured loans. The operation has reached a level considered satisfactory in terms of tranching, obtaining approximately 28,5% of the gross value of securities endowed with rating.
As regards the yield of the bonds, the Senior Class will have a equal to the 6-month Euribor + 30 bps and incorporates in the structure the premium due to the MEF for guaranteeing the securities senior.
The yield of the Mezzanine Class is equal to the 6-month Euribor + 6%, in line with market expectations and with the risk of rating associated with it.
Finally, the Junior Class may have higher returns, based on the demand that may come from end investors. The placement of classes mezzanine e junior , expected in the next few days, will allow the derecognition of the operation, with positive effects on the Bank's financial ratios.
The structure of the transaction, thanks to the combination of the securitization with the assignment of rating and the release of the GACS, at the same time makes it possible to significantly improve the valuation of the portfolio (especially compared to traditional transactions carried out on a bilateral basis) and to reduce the overall burden, while still ensuring attractive returns to potential subscribers of the various slices, including the junior .
This transaction is also significant for the Italian market, as it is a securitization with rating of NPLs in which the components consisting of mortgage loans and unsecured loans are close in percentage terms, with results deemed satisfactory in terms of notes with rating issued. The terms of the transaction are in line with the expectations of the regulators and the market with respect to the crucial issue of NPLs.
The dismissal will allow the BPB Group to improve its capital, profitability, credit quality and liquidity indicators.
