Bain acquires €385m NPL portfolio

Bain continues to expand its footprint in Southern Europe, despite a slower than expected start to the NPL sell off in the first half of this year.

Bain Capital Credit has acquired a portfolio of non-performing loans (NPL) with a nominal value of €385 million from the Italian bank Banco Mediocredito del Friuli Venezia Giulia.

The portfolio is made up of defaulted bilateral and syndicated loans secured against assets such as industrial, residential and commercial real estate.

Further financial terms of the deal could not be determined by time of publication. Aquileia Capital Services, a firm Bain took majority control of in February, will service the portfolio.

“Italy is one of the most attractive and active NPL markets in Europe and we are ready to seize more opportunities,” said Fabian Longo, head of Bain’s European NPL and real estate business.

“Thanks to the acquisition, the vendor has been able to drastically reduce its NPL ratio and support a successful capital increase,” he added.

Linklaters and Studio Legale Mannocchi & Fioretti served as legal and tax advisors on the deal. Etna and Deloitte acted as financial advisors.

Last month, Bain completed the purchase of Iberian NPLs secured against real estate assets valued at just under €1 billion.

Despite banks holding a record amount of NPLs on their balance sheets and the European Central Bank putting pressure on financial institutions, consultancy firm Deloitte reports a slower than expected start to NPL deals in the first half of 2017.

Spain and Italy, the jurisdictions in focus at the moment due to the high volume of NPLs, recorded sales of €4.7 billion and €9.3 billion. In total, Spanish banks completed 18 sales, while Italian banks finalised 12, as of 30 June.

So far, deals in 2017 completed represent €42 billion, marginally smaller than 2016’s first half totals of €45 billion. A sizeable amount of the total, however, has been recorded by the UK, following the sale of underperforming buy-to-let mortgages underwritten by Bradford & Bingley.

“Although the rate of completed transactions in Italy fell in the first half of 2017, the second half of 2017 is set to correct that,” Deloitte said.

“Italy is again set to be the most active market for distressd debt in Europe. The bailout of troubled bank Monte Paschi di Siena and the insolvency of Banco Popolare di Vincenza and Veneto Banca will help the deal flow, and a steady flow of improvements to the legal and recovery environment is building confidence in a market,” the report concluded.

A spokeswoman for Bain declined to comment beyond a company announcement.