Paschi Is Said Close to Deal for Sale of $2.4 Billion Bad Loans

(Bloomberg) -- Banca Monte dei Paschi di Siena SpA is close to finalizing the sale of 2.1 billion euros ($2.4 billion) of bad loans to investors including Banca Ifis SpA and Credito Fondiario SpA, people with knowledge of the matter said.

The package, dubbed Project Merlino, includes four portfolios of mostly unsecured loans, the people said, asking not to be identified as the process is confidential. Ifis and Credito Fondiario are among firms that submitted binding offers for portions of the debt, according to the people. An announcement may come as earlier as next week, they said.

Representatives for Paschi, Ifis, and Credito Fondiario declined to comment.

The disposal is part of an ongoing cleanup of Monte Paschi’s balance sheet, and Chief Executive Officer Marco Morelli seeks to offload 3.7 billion euros of non-performing loans over the coming months. Earlier this year, the bank closed a 24.1 billion-euro securitization of NPLs, the biggest disposal of European bad debt to date.

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