Italy's First Bad-Loan Guarantee Said Set to Cost Bank About 1%
- Popolare di Bari close to agreeing fee in securitization deal
- Deal could set benchmark for state bad-debt sale program
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Banca Popolare di Bari SCpA will initially pay 90 basis points to 100 basis points for an Italian government guarantee on bad loans it intends to sell, according to two officials at the lender.
The annual price, covering the senior tranche in a 500 million euro ($570 million) securitization, will run for three years, said the people who asked not to be identified because the talks are private. It will climb to 220 basis points in years four and five, and to 300 basis points in the following two years, they said. The senior tranche will be about 60 percent of the securitization, which the bank aims to sell by the end of June, they said.