Reuters logo
Monte Paschi close to striking deal over bad loan sale-sources
June 27, 2017 / 3:48 PM / 6 months ago

Monte Paschi close to striking deal over bad loan sale-sources

MILAN, June 27 (Reuters) - Monte dei Paschi di Siena is close to reaching a final deal with an Italian bank bailout fund for the sale of its bad loan portfolio, a key plank of its rescue plan, three sources close to the matter said on Tuesday.

One of the sources said the deal envisaged the sale of 26 billion euros ($29 billion) of bad loans repackaged as securities at an average price of 21 percent of their gross book value - for a total of around 5.5 billion euros.

Under the deal, the Atlante 2 fund - which is financed by mostly private Italian financial institutions - will buy the mezzanine and junior tranches for around 1.8 billion euros, the source said.

A senior tranche of just over 3 billion euros will be sold to institutional investors using a state guarantee, while around 500 million euros will stay with the bank, the same source said.

“Most of the work has been done but there are still a few details to be ironed out,” a second source said.

The deal is the latest step in a long-running process to stage a state rescue of the world’s oldest bank, including efforts to enable it to shed its bad loans.

$1 = 0.8854 euros Reporting by Massimo Gaia, writing by Silvia Aloisi

Our Standards:The Thomson Reuters Trust Principles.
0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below