This website use cookies and similar technologies to improve the site and to provide customised content and advertising. By using this site, you agree to this use. To learn more, including how to change your cookie settings, please view our Cookie Policy
Pocketmags Digital Magazines
Pocketmags Digital Magazines
   You are currently viewing the Italy version of the site.
Would you like to switch to your local site?
Digital Subscriptions > The Hedge Fund Journal > Issue 118 - Nov | Dec 2016 > An Overview of the Italian NPL Market

An Overview of the Italian NPL Market

Current status and future opportunities

In 2016 the gross book value (GBV) of NPLs on Italian banks’ balance sheets exceeded Euro 200 billion. Interest from foreign specialized investors has increased considerably in recent months. During 2016 we have seen an increase in the number of transactions but it is also true that this market has so far not expressed all its potential. Driven by the aim of helping Italian banks clean up their balance sheets, the Italian Government has put in place several initiatives both to facilitate the disposal of the NPLs and to reduce their occurrence going forward. These initiatives fall into four categories: (A) the introduction of a State guarantee scheme (known in Italy as “GACS”) whereby the Italian Treasury guarantees senior tranches of ABS backed by Italian NPLs; (B) the improvement of Italian bankruptcy and enforcement proceedings, (C) the introduction of new forms of security interests, and (D) opening up the market to direct lending by alternative investment funds (AIM). The idea is to make the Italian lending market more creditor friendly overall which in turn should encourage the further funding of the real economy.

The “GACS” and Atlante

The “GACS” (“Garanzia Cartolarizzazione Sofferenze” or “Non-Performing Loan Securitisation Guarantee”), is a time-limited tool in the hands of the Italian banks in that it expires in October 2017 (i.e. 16 months from enactment) unless extended by the Italian government for a further 18 months. Any such extension would be subject to the approval of the European Commission. Under this scheme the Italian Treasury guarantees senior tranches of Notes issued by Italian special purpose vehicles (SPVs) that are backed by NPLs originated by Italian banks and financial institutions. The GACS would cover interest and principal payments provided that the securitisation meets certain eligibility requirements.

Purchase options below
Find the complete article and many more in this issue of The Hedge Fund Journal - Issue 118 - Nov | Dec 2016
If you own the issue, Login to read the full article now.
Single Issue - Issue 118 - Nov | Dec 2016
Or 12999 points
6 Month Digital Subscription
Only € 140,00 per issue
Or 69999 points

View Issues

About The Hedge Fund Journal

Informing the Hedge Fund Community. With access to some of the industry’s biggest names and an astute and talented group of writers and contributors, The Hedge Fund Journal has established itself as a trusted source of information on the hedge fund industry.