UniCredit and affiliates of Fortress together with Prelios reach the agreement on the sale of UCCMB, including c. € 2.4 bn non-performing loans

Feb 11 2015

Signing of a long term strategic agreement for the servicing of certain non-performing loans

UniCredit announces that it has signed an agreement with affiliates of Fortress Investment Group LLC (NYSE: FIG) (“Fortress”) regarding:

  • the sale to affiliates of Fortress of the entire participation of UniCredit in UniCredit Credit Management Bank S.p.A. ("UCCMB"), including a portfolio of non-performing loans of c. € 2.4 bn (gross book value); and
  • the key terms and conditions of a long term strategic relationship for the servicing of UniCredit’s current and future small-to-medium sized non-performing loans. Fortress and Prelios have agreed to co-operate as industrial partners in relation to the servicing of certain non-performing loans.

The transaction, which is part of a substantial reorganisation of UniCredit’s credit recovery division, has strong strategic merits for UniCredit, enabling the wider group to benefit from:

  • access to a specialized collection platform which will be further strengthened by the significant know-how of certain affiliates of Fortress and Prelios in relation to the servicing sector;
  • improved management accountability and monitoring processes; and
  • potential improvement of the wider group’s profitability going forward due to the expected enhanced collection performance on small-to-medium non-performing loans.

The sale of the portfolio of non-performing loans of c. € 2.4 bn is also in line with UniCredit’s objective of accelerating the wind-down of its non-core business in Italy, contributing to the further de-risking of its balance sheet and optimising the use of its regulatory capital.

The transaction’s impact is estimated to be substantially neutral on regulatory capital and net income for the UniCredit group.

Deal completion, subject to specified regulatory authorisations and customary conditions for transactions of this kind, is expected to take place in the second quarter of 2015.

This transaction will help to make the Italian servicing market for the recovery of nonperforming loans more independent and represents a positive step for the sector, in line with developments in other European countries.

UniCredit has been assisted by UBS Investment Bank, as financial advisor, and by Gianni Origoni Grippo Cappelli & Partners, as legal advisor.

Fortress and Prelios have been assisted by Mediobanca and Rothschild, as financial advisor, and by Legance, as legal advisor.