State aid: Commission approves Italian market conform scheme to manage publicly guaranteed loans
The European Commission has found Italy’s plan to enable the transfer of certain State guaranteed loans to a newly created platform managed by AMCO S.p.A. to be free of any State aid. The Commission found that, under the scheme, the Italian State will be remunerated in line with market conditions. It also found that the sale of the loans to the platform managed by AMCO as well as any potential new loans granted by it will be carried out on market terms. Italy notified the Commission of its intention to allow banks to transfer off their balance sheets around €12 billion in two types of loans: (i) loans benefitting from a State guarantee initially approved under the State aid Temporary Framework in April 2020 (SA.56966); and (ii) unguaranteed loans of either the same debtors or connected ones. The economic and legal terms of the State guarantees, namely their duration, coverage and premiums, will remain as initially approved by the Commission. Under the scheme, the loans will first be transferred from the banks to AMCO’s platform. The price for those loans will be based on private investors’ bids. In return for the transferred loans, investors, which may include the originating banks, will receive notes. The Commission assessed the scheme under EU State aid rules, in particular Article 107(1) of the Treaty on the Functioning of the European Union (‘TFEU’). In this case, the Commission found that the transfers of the loans as well as AMCO’s services will be carried out on market terms, i.e. in a manner that would be acceptable for a private operator. On this basis, the Commission approved the Italian measure under EU State aid rules. Executive Vice-President Margrethe Vestager, in charge of competition policy, said: “This scheme will enable Italy to maximise the recovery of loans while reducing the impact of the existing State guarantees on the national budget and the effects on the borrowers with good prospects of viability. This is an important step towards recovery for the Italian economy, while ensuring that competition is not distorted.” A press release is available online.
