Allen & Overy has advised funds managed by PIMCO on investments in Project Fino, the divestment by Unicredit of EUR17.7 billion of Italian non-performing loans by way of separate securitisations to PIMCO-managed funds and Fortress Investment Group. The transaction is regarded as the most significant deal to date in the Italian NPL sector.
“This is an important sale and one that sets a precedent for other Italian banks to follow suit,” commented partner Stefano Sennhauser, who led the transaction from Milan.
 
“The strain of NPLs on the Italian banking system is well documented and our work with PIMCO on this market-leading transaction, using securitisation as a means of transferring the risk of NPLs, is a great example of our ability to deliver results on important deals.” commented London-based partner Lucy Oddy.
 
NPLs accumulated at Italian banks as a result of the 2008 recession, and after the 2011 Italian sovereign debt crisis, there was another marked rise in the rate of new non-performing loans. Italian banks currently hold approximately EUR200 billion in gross NPLs, a situation that the Bank of Italy finds ‘serious but manageable’. The sale of a significant proportion of these assets will be welcomed by debt market investors.
 
The transaction team was led by partner Stefano Sennhauser and associate Federico Fanelli in Milan, and partner Lucy Oddy and associate Sree Mitra in London, with support from tax counsel Michele Milanese and other lawyers in London, Milan and New York.