June 28, 2018 / 2:01 PM / in 4 months

Bain Capital Credit to buy 450 million euro soured loans from Credit Agricole Italia: source

MILAN (Reuters) - Bain Capital Credit, part of global investment firm Bain Capital, has won a race to buy a soured debt portfolio from the Italian arm of French bank Credit Agricole (CAGR.PA), a person familiar with the matter said.

The source said the portfolio, with a gross book value of 450 million euros ($521 million), comprises so-called ‘unlikely-to-pay’ (UTP) loans backed by real estate assets.

UTP loans are not yet in default but they are unlikely to be repaid in full.

The Italian market for soured bank debt, Europe’s biggest, is proving resilient to growing political risk in the country after an anti-establishment government came to power this month.

Investors say an economic recovery supports demand but higher financing costs, following a rise in Italian bond yields, may affect prices.

The source said Bain Capital Credit was advised on the purchase by EY, which also worked with the credit specialist on a 100 million euro portfolio of impaired loans backed by industrial and commercial properties which earlier this month it agreed to buy from Italian leasing group Alba Leasing.

The two are also working together on a portfolio of soured real estate loans put up for sale by Banca Carige (CRGI.MI). Credit Agricole and Bain Capital Credit declined to comment.

Reporting by Valentina Za; editing Giselda Vagnoni

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