Banca Generali asked for help from a London judge in its attempt to find out what it sold to its clients, with many underlying credits now in some form of default.
The Italian wealth manager wants CFE Finance to provide it with documents relating to the underlying assets at a hearing Tuesday.
Lawyers for Banca Generali say they need to be able to comply with regulators and to properly value the assets if they want to keep the deal. Out of 73 credits held in three Trade Finance securitization vehicles, 31 were in default with payments in arrears.
It's inexplicable that they haven't been able to provide accurate information on the first day.
CFE arranged four Trade Finance securitizations for Banca Generali's clients.
| Securitization | Total senior notes sold | Outstanding senior notes | Maturity date | Total receivables | Receivables in default |
|---|---|---|---|---|---|
| TF I | 180 million euros | 47 million euros | October 2021 | not available | not available |
| TF II | 60 million euros | 49 million euros | April 2022 | 19 | 13 |
| TF III | 98 million euros | 98 million euros | July 2022 | 23 | 10 |
| TF IV | 150 million euros | 150 million euros | December 2023 | 31 | 8 |
According to documents prepared for the hearing by the Swiss manager, lawyers for CFE said it is not contractually obliged to provide the documents and INRDeals INRDeals INRDeals INRDeals INRDeals INRDeals INRDeals INRDeals INRDeals INRDeals INRDeals INRDeals INRDeals INRDeals INRDeals INRDeals INRDeals INRDeals INRDeals INRDeals INRDeals INRDeals INRDeals INRDeals INRDeals INRDeals INRDeals INRDeals INRDeals INRDeals INRDeals
After earlier gains, shares fell 2% after a trial was reported on Tuesday.
According to an analyst at Bestinver Securities, the alleged amount of potential provisions on this portfolio is significant for the company.
The bank placed high-risk notes with its clients that did not perform as they hoped due to factors like Covid-19 and the war.
The notes have suffered losses recently. CFE wrote down a 10 million euro exposure to Sudan in March and cut 80% of the value of Cuban credits because they couldn't be fully recovered because of the country's support of Russia.
The judge said she would give her decision at a later time, and suggested that both parties kept talking to each other.
Banca Generali clients face $16 million in Cuba.
According to documents Banca Generali filed to the court earlier this year, Banca Generali had previously expressed concerns that some transactions could be riskier than they initially thought.
In November, Banca Generali found out that only two out of 18 exposures in one of the securitizations had an export credit-agency guarantee. The bank said in March that it was concerned about notes maturing between October and April that haven't been repaid yet.
The second set of Trade Finance notes was arranged by CFE to present a problem for Banca Generali's clients in less than a year. The private banking and wealth management unit of Assicurazioni Generali took 80 million euros of provisions in July to buy back health-care receivables.
Banca Generali's Chief Executive Officer said in a call with analysts last week that the issue was limited to Sudan and Cuba.
Mossa said the company wouldn't take provisions like it did last year with the healthcare credits.
With help from Sonia Sirletti.
(Updates with share price and judge reserving her decision in 11th paragraph.)
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