Renewal of Italian guarantee scheme credit positive for banks - Moody's
MILAN, March 25 (Reuters) - A two-year extension of a public
guarantee scheme on bad loan securitisations is positive for
Italian lenders despite stricter conditions, Moody's Investors
Service said on Monday.
Italy's Treasury last week renewed the scheme designed at
helping banks shed bad debt.
* The scheme's two-year extension is credit positive for
Italian banks because they can continue to cut their stock of
bad loans, Moody's says
* Under the new scheme, senior notes in bad loan
securitisations tapping the state guarantee must be rated at
least 'Baa2' versus 'Baa3' previously
* Banks have so far completed 21 transactions using the GACS
state guarantee scheme, securitising more than 62 billion euros
($70 billion) in bad loans
* Of the 14 GACS-backed bad loan securitisations rated by
Moody's, eight have senior notes carrying a 'Baa3' rating, below
the current minimum 'Baa2' level
* Italian banks' bad loans as a percentage of gross loans
fell below 11 percent last year from 14.5 percent at the end of
($1 = 0.8828 euros)
(Reporting by Alessia Pe; Editing by Mark Potter)
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