Exclusive-UniCredit set to sell 2 billion euros in ‘UTP’ loans to DK-owned Prelios – sources

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The deal would mark an important step for Prelios, which bankers say is evaluating a possible initial public offering or a tie-up as its owner, U.S. investment fund Davidson Kempner, looks to cash out after its 2018 buyout of the Milan-based group.

A sale would lower UniCredit’s impaired loan burden close to 3.1% of total lending, based on Reuters calculations, compared with 3.6% at the end of December.

Both UniCredit and Prelios declined to comment.

The portfolio comprises so-called ‘unlikely to pay’ (UTP)loans, which are not yet in default but are deemed unlikely to be recovered in full, with an average size below 5 million euros each, the three sources said.