- Fortress, Bain Capital, Blackstone picked to bid on loans
- Must submit binding bids in October: sources
- Starwood Capital may also be allowed to join race: sources
U.S. funds Fortress Investment Group, Bain Capital and Blackstone have been picked to submit binding bids for a 1 billion euro ($1.1 billion) Italian bad-loan portfolio, two sources said.
As part of Italy’s rescue of Banca Marche, Banca Etruria, CariFerrara and CariChieti in November 2015, gross bad debts from the four banks worth 10.3 billion euros were spun off into a separate vehicle, REV-Gestione Crediti.
REV, which is being advised by KPMG, has shortlisted the three U.S. funds after receiving more than two dozen expressions of interest in the portfolio, which is backed mainly by property assets, the sources said.
The three funds will have to submit binding proposals in October, the sources said, adding that a fourth bidder, Starwood Capital Group, may still be allowed to join the race.
All interested parties either declined to comment or were not immediately available for a comment.
Italian banks are under regulatory pressure to shed soured debts that rose to a total of 349 billion euros during a harsh recession. And international investors have increasingly set their sights on a market that is still underdeveloped.
Consultancy PWC said bad-loan sales in Italy could top 60 billion euros this year, driven by balance-sheet clean-ups at Monte dei Paschi di Siena and UniCredit.
The two lenders alone are set to offload 44 billion euros in bad debts. UniCredit has been able to tap markets to offset the hit from the disposal but Monte dei Paschi failed to raise capital from investors and is being bailed out by the state.
Midsized regional lender Creval said July 13 it had sealed a 1.4 billion euro bad-loan sale.