UniCredit picks Prelios as soured loan partner, sheds 2 billion euro portfolio

UniCredit completes second share buyback of 1 billion euros
UniCredit completes second share buyback of 1 billion euros Copyright Thomson Reuters 2022
By Reuters
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MILAN – Italian bank UniCredit said on Wednesday it had struck an accord with Prelios, an Italian bad loan specialist owned by U.S. fund Davidson Kempner, over the management of “unlikely to pay” (UTP) loans.

Confirming what Reuters reported exclusively earlier this year, UniCredit said Prelios would be its preferred partner to manage corporate UTP loans, which are not yet in default but are unlikely to be repaid in full.

Under the accord, Prelios would get an initial stock to manage in 2022 and new flows of UTPs for the next six years, UniCredit said.

Analysts have said the accord with Prelios was bad news for doValue, a rival debt recovery firm born out of the spin-off of UniCredit’s bad loan unit which also has a long-term contract to manage the bank’s soured debts.

UniCredit said it had worked with Prelios to sell 2 billion euros in corporate UTPs in a securitisation deal, adding Prelios would act as servicer on the portfolio to recover the loans.

UniCredit said private equity fund Christofferson, Robb and Company was the main investor in the riskier tranches of the securitisation, which allowed the bank to shift the loans off its books in accounting terms.

UniCredit was assisted by PwC and Deloitte as financial advisers and by Chiomenti, BonelliErede and Uniqlegal as legal advisers.

Prelios was assisted by Bain & Company as strategic adviser, KPMG and EY as financial advisers, CRCCD and Linklaters as legal advisers.

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