MILAN, June 27 (Reuters) - Monte dei Paschi di Siena is close to reaching a final deal with an Italian bank bailout fund for the sale of its bad loan portfolio, a key plank of its rescue plan, three sources close to the matter said on Tuesday.
One of the sources said the deal envisaged the sale of 26 billion euros ($29 billion) of bad loans repackaged as securities at an average price of 21 percent of their gross book value - for a total of around 5.5 billion euros.
Under the deal, the Atlante 2 fund - which is financed by mostly private Italian financial institutions - will buy the mezzanine and junior tranches for around 1.8 billion euros, the source said.
A senior tranche of just over 3 billion euros will be sold to institutional investors using a state guarantee, while around 500 million euros will stay with the bank, the same source said.
“Most of the work has been done but there are still a few details to be ironed out,” a second source said.
The deal is the latest step in a long-running process to stage a state rescue of the world’s oldest bank, including efforts to enable it to shed its bad loans.
$1 = 0.8854 euros Reporting by Massimo Gaia, writing by Silvia Aloisi