Italy’s MPS maintains capital reserves through loan securitization deals


MILAN, 23 July. (Reuters)State Italian bank Monte dei Paschi di Siena BMPS.MI said on Friday it would free up capital through two synthetic transactions that would reduce credit risk on corporate loans by € 1.4 billion ($ 1.7 billion).

Monte dei Paschi (MPS) said it repackaged the loans into securities and shifted risk to the junior and mezzanine tranches to finance Christofferson Robb & Company through a guarantee agreement.

MPS said this is the first of its kind in Italy in a so-called “stage 2” loan – assets that are beginning to show signs of deteriorating credit quality.

The deal was arranged by Intesa Sanpaolo, and Chiomenti acted as legal adviser.

(1 dollar = 0.8504 euro)

(Report by Valentina Za, edited by Maria Pia Quaglia)

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