UniCredit sells risk on $1.2 billion of loans to U.S. fund

Tue Jan 21, 2014 6:00am EST
 
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MILAN (Reuters) - UniCredit (CRDI.MI: Quote) has sold some of the risk on a 910 million euro ($1.2 billion) portfolio of Italian project finance loans, freeing up capital for new lending and benefiting from growing appetite for such deals from specialist investors.

The deal could be followed by similar transactions, a source close to the bank said, as UniCredit seeks to increase loans to Italian companies at a time when the first signs of economic recovery are emerging in the euro zone's third-largest economy.

"The transaction signals a strong interest of foreign investors for Italian assets," a UniCredit spokesman said.

An upcoming health check for euro zone banks and pressure from the Bank of Italy have forced Italian banks to write down the value of problematic loans in the past months, attracting foreign buyers to some of these assets.

UniCredit said on Tuesday it had sold the risk on junior and mezzanine notes to the International Infrastructure Finance Company Fund and Mariner Breakwater, two funds managed by Mariner Investment Group, a U.S. specialist credit and infrastructure asset manager.

Italian banks cut lending to companies by 98 billion euros between November 2011 and the same month of last year, according to data published by the country's central bank in January, as lenders tried to keep a lid on surging bad loans.

Both risky lending and non-performing loans are constraining the ability of Italian banks to give fresh credit to companies and the Bank of Italy has urged lenders to start selling their bad debt to free up capital.

In December UniCredit reached an agreement with Cerberus European Investments LLC to sell a portfolio of non-performing loans with a gross value of around 950 million euros.

(Reporting by Francesca Landini and Danilo Masoni; Editing by Mark Potter)

 
Italy's largest bank UniCredit is pictured in downtown Milan September 12, 2013. REUTERS/Stefano Rellandini