AnaCap buys €2bn of Italian NPLs

AnaCap Financial Partners has bought two Italian non-performing loan portfolios with a combined face value of more than €2 billion.

The private equity firm purchased the portfolios for an undisclosed amount from two separate Italian securitisation vehicles majority-owned by GE Capital Real Estate and Royal Bank of Scotland respectively.

Each portfolio has a gross book value of around €1 billion and each comprises secured and unsecured SME loans. The secured positions are held against residential and commercial properties.

The deal is evidence that lenders in the Italian market are prepared to deleverage their non-performing loan books. Recent reforms to enforcement legislation have encouraged investor demand for NPL portfolios in the country.

AnaCap acquired the portfolios through its AnaCap Credit Opportunities III fund. AnaCap already owns two Italian NPL portfolios totalling €2.5 billion, which it acquired from UniCredit in 2014 and 2015. In total, AnaCap funds have bought around €8 billion of Italian NPLs during the last four years as well as a €550 million performing portfolio of Italian salary-guaranteed loans.

“We are delighted to have completed the acquisition of these two portfolios, adding to our extensive track record in the Italian market. Our earlier NPL investments mean that we are very familiar with these types of residual claims and their varied servicing requirements,” said Justin Sulger, partner at AnaCap Financial Partners LLP.

“We are also pleased to continue to work with a growing range of financial institutions undergoing restructuring across Europe, including numerous repeat transactions, as well as a broadening network of trusted local partners,” Sulger added.

Loan sales activity is expected to accelerate in Italy this year. In addition to new enforcement legislation, an Italian asset management agency – the National Resolution Fund – has been established. The ‘bad bank’ only holds €750 million of real estate-related NPLs at this stage, but it is expected to inherit additional loans.

In its Q4 2015 European loan sales research, Cushman & Wakefield said that the Italian secured NPL market picked up in 2015, with €5 billion of real estate loan and real estate-owned property sold during the year, up on just €400 million in 2014.

In addition, the Italian government announced in January an EU deal which will allow it to provide guarantees to the country’s banks for securitising NPLs. Ian Balkwill, a structured finance partner in the London office of law firm Reed Smith, said the move is significant for real estate and CMBS issuance, depending on the extent to which Italian banks deploy securitisation as a means of off-loading CRE NPLs.

It is estimated that Italy’s banks have €350 billion of NPLs on their balance sheets. UniCredit and Intesa Sanpaolo are expected to step up their loan sale activity this year.