MILAN, May 10 (Reuters) - Italian banking industry rescue fund Atlante has closed the purchase of 2.2 billion euros ($2.4 billion) in problem loans repackaged as bonds, in a move needed to complete UBI Banca’s purchase of three small rivals rescued in late 2015.
The problem loan sale was one of the conditions posed by UBI to agree to the acquisition of Banca Marche, Banca Etruria and CariChieti, for which it paid a symbolic 1 euro price.
Atlante II, which is dedicated to buying soured debts, is set to pay 713 million euros initially for the portfolio or 32 percent of its nominal value, it said in a note.
The fund said the price reflected the fact that 80 percent of loans in the portfolio were backed by a collateral and the fact that around half of them are unlikely-to-pay loans, not yet defaulted loans or “sofferenze” -- which were spun off into a separate vehicle at the time of the rescue.
Atlante said a 200 million euro senior term financing which was being arranged with a group of banks would reduce the sum it is set to pay to 513 million euros, which will be used to buy the mezzanine-junior notes backed by the problem loan portfolio. ($1 = 0.9195 euros) (Reporting by Valentina Za)