Italy’s 2024 in Structured Finance So Far: What’s Up With NPLs?

Standing at EUR 1.9 billion as of the end of April 2024, Italian new issuance had gotten off to a slow start this year—and until then it was entirely ABS (EUR 4.3 billion in Italian RMBS was issued in May). NPL securitisations have not made their 2024 debut yet; that’s not to say that the NPL or reperforming loan sector is quiet and often issuance is weighed towards the second half of the year. For outstanding transactions we rate, many NPL servicers have been revising their business plans since underwriting. To date, we have received at least one updated version of the servicer business plan for 33 of the 37 Italian NPL transactions we have rated since 2016. In general, it appears that servicers of newer deals have become more conservative and built the effects of the pandemic and rising interest rates into their assumptions. Their expectations do not drop as much with each new business plan update, compared with servicers of older deals.