Maior SPV S.r.l.: 05 August 2018
Official Press Release:
http://www.ubibanca.it/contenuti/file/UBI%20Banca_Press%20release%2001082018_eng.pdf
PRESS RELEASE
UBI BANCA ANNOUNCES:
− THE SECURITISATION OF A PORTFOLIO OF BAD LOANS WITH A GROSS BOOK VALUE (GROSS NOMINAL VALUE) OF €2.75 BILLION. APPLICATION WILL BE MADE SHORTLY FOR GACS ON THE RELATIVE SENIOR TRANCHE
− A SECOND PORTFOLIO OF BAD LOANS IS BEING PREPARED FOR DISPOSAL, WITHOUT RECOURSE TO SECURITISATION
THESE TRANSACTIONS ARE CONSISTENT WITH THE DISPOSAL SCENARIOS ENVISAGED IN THE IFRS9 FTA
Bergamo, 1st August 2018 – As part of its NPE reduction Plan designed to bring the ratio of gross non-performing loans below the 10% level by end 2019/beginning 2020, UBI Banca reports that:
1. It has concluded the transfer of a portfolio of bad loans for which the gross book value (gross nominal value) on the reference date (31.12.2017) amounted to €2,748.8 million to the independent securitisation vehicle Maior SPV S.r.l.
The transfer price is substantially in line with the current net carrying amounts of the loans transferred, and such as to comply with the requirement set out in the regulations for the release of the guarantee on the securitisation of bad loans (“GACS”) pursuant to Law Decree 18/2016.
Consistent with the Group’s NPE management strategy, focused primarily on direct credit recovery, the portfolio is composed mainly of unsecured loans (53.4%, while secured loans account for 46.6% of the portfolio);
2. the securitisation vehicle Maior SPV S.r.l. has proceeded to the issuance of senior, mezzanine and junior notes which have been subscribed by UBI Banca S.p.A as follows:
− Senior investment grade notes amounting to €628.5 million, accounting for 22.86% of the gross nominal value and 38.9% of the gross balance sheet exposure. These percentages are high, notwithstanding the large presence of unsecured loans, which confirms the overall credit quality.
The ratings assigned by the specialist rating agencies Scope Ratings GmbH and DBRS are BBBsf and BBB (low)(sf) respectively.
− Mezzanine notes amounting to €60 million (no rating assigned);
− Junior notes amounting to €26.9 million (no rating assigned).
The securitisation was structured with the assistance of Mediobanca Banca di Credito Finanziario and Société Générale as the Arrangers. The law firms Chiomenti and RCC advised UBI Banca and the Arrangers respectively on the legal aspects.
The securitisation vehicle Maior SPV Srl appointed Prelios Credit Servicing S.p.A. as the Servicer and Special Servicer for the securitised portfolio. It will carry out management, administration, recovery and enforcement of recovery of the loans in the name of and on behalf of the securitisation vehicle. Securitisation Services will act as Corporate Services Provider, Representative of the Noteholders, Calculation Agent, Back-up Servicer and Monitoring Agent.
The senior notes will be maintained in UBI Banca SpA’s portfolio and will bear interest equal to 6M Euribor + 0.5%. An application will be made shortly, with regard to the senior notes, for the issue of a guarantee by the Italian government (GACS) in accordance with Law Decree No. 18/2016.
The mezzanine and junior notes will be sold by UBI Banca to third-party investors. The deconsolidation of the bad loans underlying the securitisation is expected in the 2018 third quarter financial results.
Following that deconsolidation, the proforma ratio of gross non-performing loans to total gross loans is expected to fall, based on March 2018 figures, from 12.74% to approx. 11.3%.
As a consequence of the disposal:
- no negative impacts are expected on capital ratios
- a significant reduction of the Texas ratio is expected of around 10 percentage points.
In addition to the operation described above, an additional bad-loan portfolio is currently being defined, expected to be made up by around 90% of unsecured loans, for a overall amount lower than that of the above mentioned securitisation. This additional portfolio will be sold by end 2018/beginning 2019 and will not be securitised. Details of this transaction will be disclosed in due time.