MILAN (Reuters) -The Bulgarian unit of Italian bank UniCredit has completed a 2.1 billion euro ($2.5 billion) transaction with PGGM, the asset manager of Dutch healthcare workers’ pension fund PFZW, to shift risk on corporate loans.
The transaction, dubbed Project ARTS Silver-2, is the largest of its kind in Bulgaria and one of the biggest ones in central and eastern Europe (CEE), UniCredit said.
Banks use significant risk transfer transactions to free up capital that would be otherwise tied up against their loan book for regulatory purposes.
Under such deals, which are described as synthetic because there is no sale or transfer of the underlying assets like in an ordinary securitisation, banks shift asset risk off their balance sheet.
With Project ARTS Silver-2, UniCredit Bulbank sold the second loss tranche of a securitised portfolio of corporate and small business loans to PGGM. It retained the first loss and senior tranches.
Securitising an asset entails issuing notes backed by the assets.
UniCredit’s latest deal follows Project ARTS Morava which UniCredit completed in 2024, also with PGGM.
“The size of the deal and the resulting capital reliefs, achieved both at bank and group level, confirm UniCredit’s strategy on capital efficiency,” said Stefano Chiarlone, head of balance sheet management at UniCredit.
“After Italy and Germany, UniCredit has successfully expanded Significant Risk Transfer (securitisations) to the CEE area, where this transaction represents our fifth deal.”
($1 = 0.8520 euros)
(Reporting by Valentina ZaEditing by Keith Weir)
