GSO strikes lending partnership in Italy with Intesa

Italian bank, Intesa Sanpaolo and GSO Capital Partners, the credit arm of Blackstone, have announced a strategic lending partnership. The initiative aims to provide loans of around €20 million to €40 million to Italian mid-market borrowers with turnover of between €80 million to €350 million, Giovanni Gilli, head of Intesa’s Capital Light Bank, told PDI. 

The final details have not been fully hammered out, he said, but the bank has a strong pipeline of clients that it can refer to alternative lender GSO. Deals will be struck on a case-by-case basis and the partnership will focus on both existing Intesa Sanpaolo clients as well as the wider Italian mid-sized corporate space.

Asked whether Intesa would earn a finders’ fee for sourcing loan opportunities from its own client base, Gilli said the details were not finalised but that is the likely approach. The bank will refer potential deals to GSO which will make its own credit decision. Transactions executed through the partnership will be managed by Intesa, Gilli explained. 

The Italian lender has struggled with the pressures on capital that the whole Italian banking sector and last year announced that it would move €46 billion-worth of bad assets onto the balance sheet of a newly formed entity, Capital Light Bank. Gilli added that the partnership discussions with GSO started well before he took on his role at Capital Light Bank, and that the new partnership is wholly focused on new lending, not the sale of legacy assets.

Recent changes in Italian legislation opened the country up to lending by non-bank providers. The market is changing and the bank has recognised this, Gilli said, adding that Intesa will continue to lend itself. 

“This is not in substitution of our role as a leading financial entity in Italy, it is in addition and to provide synergies [for our clients],” said Gilli.

Intesa’s Italian business has 11.1 million customers and a network of 4,500 branches.

GSO invests in mezzanine debt, distressed investing, leveraged loans and other special-situation strategies. It has around $79 billion in assets under management.