In This Article:
(Bloomberg) -- Banco BPM SpA is seeking investors for two significant risk transfers, potentially boosting its capital strength at a time when it’s also trying to stave off a takeover pursued by rival UniCredit SpA.
Most Read from Bloomberg
-
NYC’s Subway Violence Deters Drive to Bring Workers Back to Office
-
NYC Condo Owners May Bear Costs of Landmark Green Building Law
The SRTs offered by Italy’s third-biggest bank are linked to loan portfolios worth about €4.5 billion ($4.7 billion) in total, people familiar with the matter said. They are part of Banco BPM’s regular issuance program for the transactions, the people said.
One transaction is marketed by Banco Santander SA and involves a bundle of about €2.5 billion in large corporate loans, while the other one is plugged by Intesa Sanpaolo SpA and connected to roughly €2 billion in credit for small and medium-sized enterprises, the people said. The terms including the final size of the SRTs, which the bank aims to complete by the end of the current quarter, may vary as the sales process is at an early stage, the people said, asking not to be identified discussing the private information.
Representatives for Banco BPM and Intesa declined to comment. A Santander representative didn’t have a comment when contacted by Bloomberg.
Banco BPM is at the heart of several potential deals that may reshape Italian banking this year. The Milan-based lender in early November offered to buy the asset manager Anima Holding SpA, but that effort was disrupted a couple of weeks later when crosstown competitor UniCredit in turn announced its intention to take over Banco BPM, a move rebuffed by the smaller lender’s CEO, Giuseppe Castagna.
Castagna has since been exploring two main options to defend Banco BPM’s independence: boosting financial targets as a way to persuade investors they’re better off rejecting UniCredit’s proposal, or reaching a merger agreement with Italian lender Banca Monte dei Paschi di Siena SpA, Bloomberg reported last month.
Although the two SRTs marketed by Banco BPM at present don’t seem to be directly linked to Castagna’s defense considerations, a higher capital ratio could make it easier for him to go through with his plans.
SRTs, also known as synthetic risk transfers, are increasingly popular transactions that banks can use to shift some credit risk to investors. This enables them to free up capital they are otherwise required to hold as backstop for the underlying loans.