Banco BPM Said to Seek Bids for $4.1 Billion of Bad Loans

(Bloomberg) -- Banco BPM SpA is seeking offers for at least 3.5 billion euros ($4.1 billion) of bad loans and its credit-servicing platform, people with knowledge of the matter said.

The Milan-based lender is adding to a wave of Italian bad-debt sales as banks take advantage of an economic rebound and legal changes that are improving buyer appetite among foreign firms. Banco BPM is soliciting bids from investors by July 6. It will allow them to extend their offers to include the remaining 6.5 billion euros of soured loans it holds and its debt-collecting division, said the people, who asked to not be identified because the process is private.

"The process of de-risking of the Italian banking system doesn’t seem to be hampered by the new government," said Massimo Famularo, board member of Frontis NPL, a specialist in bad-loan management. "Banco BPM has already demonstrated that it’s on track with its deleveraging plan, sticking with the ECB guidelines when it merged with Banco Popolare in 2017."

Groups receiving the sales documents, known as teasers, include Davidson Kempner Capital Management with Prelios SpA, doBank SpA, Guber Banca SpA, Credito Fondiario SpA and a group led by Christofferson, Robb and Co. Banco BPM is also finalizing a separate sale of 5.1 billion euros of bad loans through a securitization backed by a state guarantee and is seeking bidders for the riskiest portion of the sale.

Banco BPM climbed as much as 2.5 percent in Milan trading and was up 2 percent at 2.33 euros as of 1:48 p.m. making it the fourth-best performer in the 42-member Bloomberg Europe Banking Index. The Italian benchmark FTSEMIB Index was down 0.4 percent.

Representatives at Banco BPM declined to comment as did the companies that were said to be approached. Deutsche Bank AG, Deloitte LLP and Banca Akros SpA, which are advising the Italian bank, also declined to comment.

Banco BPM Chief Executive Officer Giuseppe Castagna last month said the bank received several informal proposals to buy the bank’s loan-servicing platform after a similar transaction by Intesa Sanpaolo SpA and Intrum Justitia AB was finalized in April.

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