Investors flock to Italian bank debt

ITALIAN DEBT

While corporate debt has grown at an unprecedented rate globally since 2008, Italy's lenders are finally beginning to offload a record amount of ‘bad loans'

Italy's banks have been off-loading billions of dollars of non-performing loans (NPLs) as they grapple with unprecedented levels of debt. The country's banks own a combined €166bn of non-performing loans, a level never reached before and a significant jump from the €42bn held in 2008, according to the Italian Banking Association. The European Central Bank's upcoming Single Supervisory Mechanism is part of the impetus driving the banks to securitise their loans, as the country's financial institutions attempt to shore up their capital position before the new supervision framework comes...