May 23, 2017 / 4:11 PM / 3 years ago

Bids for Banco BPM's 'Project Rainbow' bad loan pool at 250-300 mln euro-sources

MILAN, May 23 (Reuters) - Bids submitted by investors for a 720 million euro ($809 million) bad loan portfolio that Italian bank Banco BPM has put up for sale range between 250 million and 300 million euros, three sources familiar with the matter said.

Binding offers for the portfolio, dubbed ‘Project Rainbow’, are due on June 5 at the latest and advisers KPMG and Banca Akros will take about a week to assess them, the sources said.

Banco BPM has shortlisted Blackstone, Cerberus, Bain Capital and Algebris for the deal, sources have said.

If confirmed, the offers would value the portfolio at up to around 40 percent of its gross book value, a higher-than-average price reflecting the quality of the properties backing the loans, which include prestigious hotels.

All interested parties declined to comment.

Edoardo Ginevra, the head of Banco BPM’s bad loan unit, said last week the group expected to close the sale of ‘Project Rainbow’ in the second quarter of the year.

He added the bank was already at work on a separate bad loan sale, slated for 2018, that could make use of a guarantee provided by the Italian state.

Banco BPM has pledged to cut its problem loans to win European Central Bank’s approval of last year’s merger between Banco Popolare and Banca Popolare di Milano, which gave birth to Italy’s third-largest bank.

CEO Giuseppe Castagna said this month Banco BPM would sell a 2 billion euro portfolio of unsecured loans in the second half of the year.

$1 = 0.8897 euros Reporting by Massimo Gaia e Andrea Mandala, writing by Valentina Za

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