Monte dei Paschi completes securitization for $28.7 billion bad loan sale

FILE PHOTO: People stroll in front of Monte dei Paschi bank headquarters, downtown Siena, Italy, October 27, 2017. REUTERS/Stefano Rellandini/File Photo

MILAN (Reuters) - Banca Monte dei Paschi di Siena BMPS.MI has completed the securitization for the sale of a bad loan portfolio with a gross book value of around 24.1 billion euros ($28.7 billion), obtaining investment-grade ratings on the senior tranche.

The Italian lender, which is now 68 percent owned by the state, said on Thursday in a statement that “GACS” state guarantees on the senior notes are expected to be obtained over the coming weeks, and the bad loan portfolio is expected to be deconsolidated by June.

The senior notes were issued for 2.92 billion euros, the bank said. They will yield a coupon of 3mE plus 1.5 percent, incorporating the premium due to the government for the guarantees provided on the notes.

($1 = 0.8397 euros)

Reporting by Agnieszka Flak; editing by Steve Scherer