we receive e we publish the following press release issued by Cherry Bank.
Cherry Bank, bank specializing in the retail, corporate and wealth management segments and active in NPLs, special situations and tax credits, has structured a securitization vehicle entirely dedicated to thepurchase of credits arising from operations specialized financing originated and structured by Cherry Bank’s Special Situations division. The Bank is also the exclusive servicer and co-investor of the vehicle with a 10% stake in the issue value of the receivables.
The vehicle, called “Cherry Blossom” and addressed to institutional investors, has placed the first portfolio, highly diversified, for a value equal to 30 million euros. The portfolio is composed of performing credits of companies in reversible crisis (“back to bonis”) to support their recovery and exit from the difficult situation. These exposures constitute a rapidly growing asset class, also due to the greater use of the negotiated resolution procedure for business crises, +19% in 2023 and +53% in the first half of 2024; a share that, according to some estimates, could reach +60% for the entire year. Since the entry into force of the negotiated resolution in 2021 to date, 167 companies have found a path out of the crisis with 8.250 jobs safeguarded (without considering the related companies): the success rate was almost 22% in 2023 (data source: Il Sole 24 Ore, Unioncamere/Infodata).
In the process of reversible crisis, the support of specialized finance and dedicated alternative banking instruments is central, and this is where Cherry Blossom comes in. The vehicle represents the first investment project of the Alternative Investments division of Cherry Bank that allows investors to participate in a pre-established portfolio with the aim of being able to reinvest in new opportunities that will be generated in the future by Cherry Bank.
Giovanni Bossi, CEO and first shareholder of Cherry Bank, states: “The way in which credit is made available to businesses is changing, with the need to identify alternative resources and increasingly flexible solutions to support the real economy. This operation is part of the wide range of responses that Cherry Bank has structured for companies and represents a first opportunity for institutional investors to co-invest with Cherry Bank through non-traditional models. This means attractive returns, linked to limited portfolio durations and a well-structured governance model, which represents an absolute value for co-investment operations”.
La first issue of the amount of 30 million Euro was entirely placed and subscribed by institutional investors belonging to the Italian and Anglo-Saxon banking world, financial investment companies, corporate treasuries and family offices. The vehicle issued for the occasion single-tranche notes of the type partly paid to allow the perfect alignment of interests between Cherry Bank and the Noteholders, who can benefit from a double-digit return on investment (IRR) and an expected duration of less than 3 years.
